Foreign body encapsulation represents a chronic fibrotic response and has been a major obstacle that reduces the useful life of implanted biomedical devices. The precise mechanism underlying such an encapsulation is still unknown. We hypothesized that, considering its central role in many other fibrotic conditions, transforming growth factor beta (TGFbeta) may play an important role during the formation of foreign body capsule (FBC). In the present study, we implanted mock sensors in rats subcutaneously and excised FBC samples at day 7, 21, and 48-55 postimplantation. The most abundant TGFbeta isoform in all tissues was TGFbeta1, which was expressed minimally in control tissue. The expression of both TGFbeta1 RNA and protein was significantly increased in FBC tissues at all time points, with the highest level in day 7 FBC. The number of cells stained for phosphorylated Smad2, an indication of activated TGFbeta signaling, paralleled the expression of TGFbeta. A similar dynamic change was also observed in the numbers of FBC myofibroblasts, which in response to TGFbeta, differentiate from quiescent fibroblasts and synthesize collagen. Type I collagen, the most prominent downstream target of TGFbeta in fibrosis, was found in abundance in the FBC, especially during the latter time periods. We suggest that TGFbeta plays an important role in the FBC formation. Inhibition of TGFbeta signaling could be a promising strategy in the prevention of FBC formation, thereby extending the useful life of subcutaneous implants.