Establishing an effective epidermal barrier requires a series of coordinated molecular events involving keratinocytes (KCs) within a stratified epithelium. Epidermal maturation depends on convergence of pathways involving components of NF-kappaB and peroxisome proliferator activated receptor (PPAR) signaling systems that promote terminal differentiation and production of a stratum corneum. The Notch-1 receptor and its ligand Delta-1 have been proposed by others to participate in early events in KC differentiation. Here, we establish differential expression patterns for several Notch receptors and ligands in normal human skin. These immunolocalization findings, together with functional studies demonstrating increased levels of Notch ligand/receptors occurring during the onset of differentiation, prompted use of a soluble Notch ligand, a peptide derived from the most conspicuously expressed ligand in skin, Jagged-1. Exposing submerged KC monolayers to this peptide (JAG-1) in co-presence of elevated calcium ion concentration, produced stratification with loricrin expression. Using a living human epidermal equivalent (EE) model system, when submerged cultures were raised to an air/liquid interface to generate a fully mature epidermis, activation of Notch signaling was detected. Addition of JAG-1 peptide to submerged EEs was sufficient to induce epidermal maturation. Moreover, a soluble decoy Notch inhibitor prevented such differentiation and corneogenesis in human EEs exposed to either an air/liquid interface or to the JAG-1 peptide. In KC monolayers, addition of JAG-1 peptide induced IKKalpha mediated NF-kappaB activation, as well as increased PPARgamma expression. Immunoprecipitation/Western blot analysis revealed a physical association between the p65 subunit of NF-kappaB and PPARgamma. These results indicate that activation of Notch signaling is necessary for maturation of human epidermis, and activation by a soluble Notch ligand is sufficient to trigger complete KC differentiation including cornification.