Using a signal sequence-trap we identified a human gene encoding a polypeptide of 99 amino acids with a putative signal sequence. The gene was identical to keratinocyte differentiation-associated protein (Kdap), which was reported previously by Oomizu et al (Gene 256: 19-27, 2000) to be expressed in embryonal rat epidermis at the mRNA level. In humans, we found Kdap mRNA expression to be restricted to epithelial tissue at high levels. The 12.5 kDa protein was detected in culture supernatant of keratinocytes and those transfected adenovirally with the Kdap gene. In normal skin, Kdap protein was found exclusively within lamellar granules of granular keratinocytes and in the intercellular space of the stratum corneum. By contrast, in lesional skin of patients with psoriasis, Kdap was expressed more widely throughout suprabasal keratinocytes. When induced to differentiate in vitro, keratinocytes showed marked upregulation of Kdap mRNA expression similar to that of involucrin mRNA, but with differing kinetics. Finally, a spliced variant of Kdap mRNA was generated by alternative splicing mechanisms. Our studies indicate that human Kdap resembles rat Kdap with respect to tissue and cell expression at the mRNA level and that Kdap is a low-molecular-weight protein secreted by keratinocytes. Thus Kdap may serve as a soluble regulator of keratinocyte differentiation.