Neutrophil gelatinase-associated lipocalin (NGAL) is a 25-kDa protein initially isolated from the specific granules of human neutrophils. It is a member of the highly heterogeneous lipocalin protein family, which shares a common tertiary structure. Its synthesis is induced in gastrointestinal epithelium in association with inflammation and malignancy. To gain insight into its potential role in other epithelia we have investigated the expression of NGAL in human skin embryonic development, in normal adult skin, and in skin associated with inflammation and neoplastic transformation. In the present study we report that the embryonic expression of NGAL appears to be regulated in a spatio-temporal pattern. It was induced in the interfollicular epidermis at 20-24 weeks of gestational age but thereafter progressively receded towards the hair follicles. In normal adult skin, NGAL was detected solely in association with hair follicles. However, strong induction of NGAL in the epidermis was seen in a variety of skin disorders characterized by dysregulated epithelial differentiation such as psoriasis, pityriasis rubra and squamous cell carcinoma. In these tissues production of NGAL was confined to spatially distinct subpopulations of keratinocytes underlying areas of parakeratosis, whereas skin samples lacking parakeratotic epithelium such as lichen ruber planus, acute contact eczema and basal cell carcinoma were negative for NGAL. Consistent with being a marker for disturbed terminal differentiation, NGAL immunoreactivity showed an inverse pattern when compared with that of the differentiation marker filaggrin. The biologic functions of NGAL in epithelia are not fully known, although an immunomodulatory role in host defense has been proposed. In addition, the transient interfollicular NGAL expression during skin embryogenesis along with the induction of NGAL in adult parakeratotic epidermis suggests it play a role in epithelial differentiation pathways.