Aims/hypothesis The role of TNF-α in impaired wound healing in diabetes was examined by focusing on fibroblasts. Methods Small excisional wounds were created in the db/db mice model of type 2 diabetes and normoglycaemic littermates, and in a streptozotocin-induced type 1 diabetes mouse model and control mice. Fibroblast apoptosis was measured by the TUNEL assay, proliferation by detection of proliferating cell nuclear antigen, and forkhead box O1 (FOXO1) activity by DNA binding and nuclear translocation. TNF-α was specifically inhibited by pegsunercept. Results Diabetic wounds had increased TNF-α, fibroblast apoptosis, caspase-3/7 activity and activation of the pro-apoptotic transcription factor FOXO1, and decreased proliferating cell nuclear antigen positive fibroblasts (p < 0.05). TNF-α inhibition improved healing in the diabetic mice and increased fibroblast density. This may be explained by a decrease in fibroblast apoptosis and increased proliferation when TNF-α was blocked (p  < 0.05). Although decreased fibroblast proliferation and enhanced FOXO1 activity were investigated in type 2 diabetes, they may also be implicated in type 1 diabetes. In vitro, TNF-α enhanced mRNA levels of gene sets related to apoptosis and Akt and p53 but not mitochondrial or cell-cycle pathways. FOXO1 small interfering RNA reduced gene sets that regulate apoptosis, Akt, mitochondrial and cell-cycle pathways. TNF-α also increased genes involved in inflammation, cytokine, Toll-like receptor and nuclear factor-kB pathways, which were significantly reduced by FOXO1 knockdown. Conclusions/interpretation These studies indicate that TNF-α dysregulation in diabetic wounds impairs healing, which may involve enhanced fibroblast apoptosis and decreased proliferation. In vitro, TNF-α induced gene sets through FOXO1 that regulate a number of pathways that could influence inflammation and apoptosis.