It has been established that Id proteins can block the basic helix-loop-helix (HLH) transcription factors, thereby impacting the onset of senescence in keratinocytes, as well as influencing tumorigenesis involving squamous cell carcinomas. However, the ability of Id-1 to influence the immunologic response of epithelial cells to cytokines implicated in cutaneous oncology such as gamma interferon (IFN-gamma) has not been determined. Using a whole population of human keratinocytes infected with a retrovirus to induce over-expression of Id-1, the influence on early differentiation of rapidly proliferating keratinocytes was assessed, as was the response to IFN-gamma. While induction of involucrin, a marker of early differentiation, was not altered in Id-1 overexpressing keratinocytes, the IFN-gamma mediated increase in intercellular adhesion molecule-1 (ICAM-1) and HLA-DR was reduced. No change in constitutive or inducible levels of MHC class I antigen, CD95 (Fas antigen) or LFA-3 (CD58) was observed in this system. Immunostaining and Western blot analysis revealed over-expression of Id-1 in basal cell carcinomas (BCCs). These tumors not only strongly and diffusely expressed Id-1, but were also characterized by reduced ICAM-1 and HLA-DR expression. Thus, dysregulated Id-1 may not only contribute to delaying the senescence program in keratinocytes, it may also contribute to the escape of the relatively undifferentiated tumor cells in BCC from immune surveillance.