Lipids that are synthesized de novo in the epidermis, including fatty acids, oxysterols, 1,25-dihydroxyvitamin D(3), and farnesol, can regulate the differentiation of normal human keratinocytes (NHK). Cholesterol sulfate (CS), an epidermal lipid that is produced in the upper nucleated layers of the epidermis coincident with terminal differentiation, has been shown to play a role in the regulation of the late stages of keratinocyte differentiation, including formation of the cornified envelope. In the present study, we determined i) whether CS regulates involucrin (INV), an early keratinocyte differentiation marker, and ii) the mechanism by which CS regulates differentiation. mRNA and protein levels of INV, a precursor protein of the cornified envelope, increased 2- to 3-fold in NHK incubated in the presence of CS. In contrast, cholesterol had no effect on INV protein or mRNA levels. Transcriptional regulation was assessed in NHK transfected with INV promoter-luciferase constructs. CS increased luciferase reporter activity approximately 2- to 3-fold in NHK transfected with a 3.7-kb INV promoter construct. Deletional analysis revealed a CS-responsive region of the INV promoter located between bp --2452 and --1880. A 5-base pair (bp) mutation of the AP-1 site (bp --2117 to --2111) within this responsive region abolished CS responsiveness, suggesting a role for the AP-1 complex in the regulation of INV transcription by CS. Electrophoretic mobility shift analysis demonstrated increased binding of nuclear extracts isolated from CS-treated NHK to AP-1 DNA as compared with vehicle-treated controls. Incubation of the nuclear extract with the appropriate antibodies showed that the AP-1 DNA-binding complex contained Fra-1, Fra-2, and Jun D. Western blots demonstrated that CS treatment increased the levels of Fra-1, Fra-2, and Jun D, and Northern analyses revealed that CS increased mRNA levels for these same AP-1 factors. These data indicate that CS, an endogenous lipid synthesized by keratinocytes, regulates the early stages of keratinocyte differentiation, and may do so through its ability to modulate levels of AP-1 proteins. -- Hanley, K., L. Wood, D. C. Ng, S. S. He, P. Lau, A. Moser, P. M. Elias, D. D. Bikle, M. L. Williams, and K. R. Feingold. Cholesterol sulfate stimulates involucrin transcription in keratinocytes by increasing Fra-1, Fra-2, and Jun D. J. Lipid Res. 2001. 42: 390--398.