The roles of MEK, ERK, the epsilon and alpha isoforms of protein kinase C (PKC), and caveolin-1 in regulating collagen expression were studied in normal lung fibroblasts. Knocking down caveolin-1 gave particularly striking results. A 70% decrease caused a 5-fold increase in MEK/ERK activation and collagen expression. The combined data reveal a branched signaling pathway. In its central portion MEK activates ERK, leading to increased collagen expression. Two branches converge on MEK/ERK. In one, increased PKCepsilon leads to MEK/ERK activation. In another, increased PKCalpha induces caveolin-1 expression, which in turn inhibits MEK/ERK activation and collagen expression. Lung fibroblasts from scleroderma patients with pulmonary fibrosis showed altered signaling. Consistent with their overexpression of collagen, scleroderma lung fibroblasts contain more activated MEK/ERK and less caveolin-1 than normal lung fibroblasts. Because cutaneous fibrosis is the hallmark of scleroderma, we also studied dermal fibroblasts. As in lung, there was more activated MEK/ERK in cells from scleroderma patients than in control cells, and MEK inhibition decreased collagen expression. However, the distinctive levels of PKCepsilon, PKCalpha, and caveolin-1 in lung and dermal fibroblasts from scleroderma patients and control subjects indicate that the links between these signaling proteins and MEK/ERK must function differently in the four cell types. Finally, we confirmed the relevance of these signaling cascades in vivo. The combined results demonstrate that a branched signaling pathway involving MEK, ERK, PKCepsilon, PKCalpha, and caveolin-1 regulates collagen expression in normal lung tissue and is perturbed during fibrosis.