Summary Background  Recent studies have suggested that caveolin‐1 (cav‐1) plays an important role in the regulation of transforming growth factor (TGF)‐β1 signalling and participates in the pathogenesis of tissue fibrosis. However, its effects on dermal fibrosis keloids are unknown. Objectives  To investigate the effect of cav‐1 in the pathogenesis of tissue fibrosis by keloid fibroblasts. Methods  Keloid fibroblasts were cultured and exposed to different concentrations of cav‐1 cell‐permeable peptides (cav‐1p) in the presence of TGF‐β1. Keloid fibroblast phenotypes and protein production were analysed by real‐time reverse transcriptase–polymerase chain reaction, Western blot, and multiplex enzyme‐linked immunosorbent assay techniques. The effect of cav‐1p on cell viability was evaluated by MTT assay. Results  Cav‐1 was markedly decreased in the keloid‐derived fibroblasts. Moreover, cav‐1p significantly reduced TGF‐β receptor type I levels and Smad2/3 phosphorylation in response to added TGF‐β1. Additionally, TGF‐β1 decreased cav‐1 expression in human skin fibroblasts. Cav‐1 was able to suppress TGF‐β1‐induced extracellular matrix production in cultured keloid fibroblasts through regulation of the mitogen‐activated protein kinase pathway. Conclusions  Cav‐1 appears to participate in the pathogenesis of tissue fibrosis in keloid. Restoration of cav‐1 function by treatment with a cell‐permeable peptide corresponding to the cav‐1 scaffolding domain may be a novel therapeutic approach in keloid.