Wound healing involves both local cells and inflammatory cells. Alkali burn of ocular surface tissue is a serious clinical problem often leading to permanent visual impairment resulting from ulceration, scarring and neovascularization during healing. Behaviors of corneal cells and inflammatory cells are orchestrated by growth factor signaling networks that have not been fully uncovered. Here we showed that adenoviral gene introduction of peroxisome proliferator-activated receptor-gamma (PPARgamma) inhibits activation of ocular fibroblasts and macrophages in vitro and also induced anti-inflammatory and anti-fibrogenic responses in an alkali-burned mouse cornea. PPARgamma overexpression suppressed upregulation of inflammation/scarring-related growth factors and matrix metalloproteinases (MMPs) in macrophages. It also suppressed expression of such growth factors and collagen Ialpha2 and myofibroblast generation upon exposure to TGFbeta1. Exogenous PPARgamma did not alter phosphorylation of Smad2, but inhibited its nuclear translocation. PPARgamma overexpression enhanced proliferation of corneal epithelial cells, but not of fibroblasts in vitro. Epithelial cell expression of MMP-2/-9 and TGFbeta1 and its migration were suppressed by PPARgamma overexpression. In vivo experiments showed that PPARgamma gene introduction suppressed monocytes/macrophages invasion and suppressed the generation of myofibroblasts, as well as upregulation of cytokines/growth factors and MMPs in a healing cornea. In vivo re-epitheliazation with basement membrane reconstruction in the healing, burned, cornea was accelerated by PPARgamma-Ad expression, although PPARgamma overexpression was considered to be unfavorable for cell migration. Together, these data suggest that overexpression of PPARgamma may represent an effective new strategy for treatment of ocular surface burns.