An increasing number of examples on the importance of mesenchymal-epithelial interactions in physiological (e.g. embryonic development) and pathological (tumourigenesis) processes have been described. This is best illustrated in the skin, where the well-controlled balance of keratinocyte proliferation and differentiation forms the basis for a proper histoarchitecture of the epidermis. Here, a double paracrine loop of cytokines, which are synthesised and secreted by cells of the epidermis (keratinocytes) and the underlying dermis (fibroblasts) seems to play a major role. The aim of this commentary is to review research that has investigated the role of specific subunits of transcription factor AP-1 (Jun/Fos) in this regulatory network. Using an in vitro skin equivalent model strong evidence was provided for a critical and specific function of c-Jun and JunB in mesenchymal-epithelial interaction in the skin by regulating the expression of interleukin-1 (IL-1)-induced keratinocyte growth factor (KGF) and GM-CSF in fibroblasts. These factors, in turn, adjust the balance between proliferation and differentiation of keratinocytes ensuring proper architecture of the epidermis. This commentary will summarise our current knowledge on the molecular mechanisms underlying AP-1-dependent mesenchymal-epithelial interactions and discuss the physiological relevance of these in vitro findings in skin physiology and pathology.