The silk glands of silkworms produce large quantities of fibroin, which is a protein that can be physically processed and used as a biodegradable carrier for cell growth factors in tissue engineering applications. Meanwhile, protein microcrystals known as polyhedra, which are derived from cypovirus 1, have been used as a vehicle to protect and release encapsulated cell growth factors. We report the generation of transgenic silkworms that express recombinant fibroblast growth factor-7 (FGF-7) fused with the polyhedron-encapsulating signal in polyhedra produced in the middle (MSG) and posterior (PSG) silk glands. Immunofluorescence showed that polyhedra from silk glands are associated with FGF-7. The MSG and PSG from transgenic silkworms were processed into fine powdery materials, from which FGF-7 activity was released to stimulate the proliferation of human keratinocyte epidermal cells. Powders from PSGs exhibited higher FGF-7 activity than those from MSGs. Moreover, PSG powder showed a gradual release of FGF-7 activity over a long period and induced keratinocyte proliferation and differentiation in 3D culture to promote the formation of stratified epidermis expressing positive differentiation marker proteins. Our results indicate that powdery materials incorporating the FGF-7-polyhedra microcrystals from silk glands are valuable for developing cell/tissue engineering applications in vivo and in vitro.