Caspase-14, a cysteine protease with restricted tissue distribution, is highly expressed in differentiated epidermal keratinocytes. Here, we extracted soluble proteins from stratum corneum (SC) of human epidermis and demonstrate that the extract cleaves tetrapeptide caspase substrates. The activity decreased to below 10% when caspase-14 was removed by immunodepletion showing that caspase-14 is the predominant caspase in SC. In contrast to normal SC, where caspase-14 was present exclusively in its processed form, incompletely matured SC of parakeratotic skin from psoriasis and seborrheic dermatitis contained both procaspase-14 and caspase-14 subunits. Fractionation of extract from parakeratotic SC revealed that the peak caspase activity coeluted with processed caspase-14 but not with procaspase-14. Our results suggest that during regular terminal keratinocyte differentiation, endogenous procaspase-14 is converted to caspase-14 subunits that are catalytically active in the outermost layers of normal human skin.