1. Previous studies have indicated a role for extracellular ATP in the regulation of epidermal homeostasis. Here we have investigated the expression of P2Y2 receptors by human keratinocytes, the cells which comprise the epidermis. 2. Reverse transcriptase-polymerase chain reaction (RT - PCR) revealed expression of mRNA for the G-protein-coupled, P2Y2 receptor in primary cultured human keratinocytes. 3. In situ hybridization studies of skin sections revealed that P2Y2 receptor transcripts were expressed in the native tissue. These studies demonstrated a striking pattern of localization of P2Y2 receptor transcripts to the basal layer of the epidermis, the site of cell proliferation. 4. Increases in intracellular free Ca2+ concentration ([Ca2+]i) in keratinocytes stimulated with ATP or UTP demonstrated the presence of functional P2Y receptors. 5. In proliferation studies based on the incorporation of bromodeoxyuridine (BrdU), ATP, UTP and ATPgammaS were found to stimulate the proliferation of keratinocytes. 6. Using a real-time firefly luciferase and luciferin assay we have shown that under static conditions cultured human keratinocytes release ATP. 7. These findings indicate that P2Y2 receptors play a major role in epidermal homeostasis, and may provide novel targets for therapy of proliferative disorders of the epidermis, including psoriasis.