Interleukin-18 is a potent inducer of interferon-gamma by activated T cells, macrophages, and monocytes and is synthesized as an inactive precursor. Pro-interleukin-18 must be cleaved by interleukin-1-beta-converting enzyme for secretion of the biologically active form. We report that among selected non-bone marrow derived skin cells, interleukin-18 mRNA is constitutively expressed by human keratinocytes and not by dermal microvascular endothelial cells, dermal fibroblasts, or melanocytes. Interleukin-18 mRNA and intracellular protein levels are neither changed in human keratinocytes nor induced in human dermal microvascular endothelial cells, dermal fibroblasts, or melanocytes by exposure to pro-inflammatory stimuli. Exposure of human keratinocytes to phorbol 12-myrisate 13-acetate, lipopolysaccharides or the contact sensitizer DNCB results in the secretion of immunoprecipitable interleukin-18 protein. Human keratinocyte-secreted interleukin-18 is biologically active, in that conditioned media from phorbol 12-myrisate 13-acetate, lipopolysaccharide and DNCB-treated human keratinocytes induce interferon-gamma expression by peripheral blood mononuclear cells. This bioactivity is neutralized by anti-interleukin-18, but not anti-interleukin-12 antibodies. By immunohistochemistry, interleukin-18 protein is detected in basal keratinocytes of normal human skin, but its expression is markedly upregulated in suprabasal keratinocytes in psoriasis. These findings indicate that human keratinocytes are a source of biologically functional interleukin-18 and thus are capable of playing an initiating part in the local interferon-gamma-dependent inflammatory processes through expression, activation, and secretion of interleukin-18.