The origin of myofibroblasts in fibrotic conditions remains unknown and in systemic sclerosis (SSc) it has been proposed that activation of local fibroblasts, trans-differentiation of perivascular or vascular cells, recruitment of fibrocyte progenitors, or epithelial to mesenchymal transition (EMT) could be contributing. Data from our laboratory indicate that the epidermis in scleroderma is activated with the keratinocytes exhibiting a phenotype normally associated with tissue repair, including phosphorylation profiles indicative of TGFβ signaling. Since TGFβ is a known inducer of EMT, we investigated if there is evidence of this process in the SSc epidermis. In order to validate antibodies and primers, EMT was modeled in HaCaT cells cultured in the presence of TGFβ1. Skin sections were stained with phosho-SMAD2/3, as well as with epithelial and mesenchymal markers. Moreover, mRNA levels of transcription factors associated with EMT were studied in epidermal blister sheets. We observed critical changes in the scleroderma epidermis; showing significantly increased nuclear translocation of phosphorylated Smad2/3, consistent with active TGFβ signaling in SSc keratinocytes. While profound EMT could be induced in keratinocytes in vitro with the appearance of SNAI1/2 and FSP-1, and an accompanying loss of E-cadherin, in the scleroderma skin active TGFβ signaling was accompanied by only partial EMT-like changes characterised by induction of SNAI1 alone and with no loss of E-cadherin. Together, our findings support a model of altered differentiation and TGFβ dependent activation of scleroderma epithelial cells leading to a partially evoked EMT like process in the fibrotic skin.