The link between the epidermal keratinocytes of the skin and the activated T lymphocytes of the immune system is mediated by a variety of cytokines, including gamma interferon (IFN-gamma). We studied the influence of keratinocyte mitogens such as transforming growth factor-alpha (TGF-alpha), epidermal growth factor (EGF), and somatomedin-C (SM-C) on the ligand binding of 32P-labeled IFN-gamma to cultured keratinocytes derived from normal appearing adult human skin. Keratinocytes placed in a medium devoid of mitogens become growth arrested, and these quiescent cells expressed 2.4 times (28,900 versus 12,200 sites/cell) as many high affinity IFN-gamma receptors (Kd = 0.22 nM) compared to keratinocytes which were actively growing in medium containing TGF-alpha (25 ng/ml) or EGF (10 ng/ml). The reduction in IFN-gamma receptor sites by TGF-alpha/EGF was mitogen specific, as adding SM-C (500 ng/ml) did not have any effect on ligand binding, although it similarly stimulated keratinocyte growth. The reduction in IFN-gamma receptors was time dependent, occurring primarily after 24-48 hours of change in tissue culture conditions. The reduction in the number of high affinity IFN-gamma receptors by TGF-alpha/EGF had immunobiological consequences, because quiescent keratinocytes in basal medium had an increased expression of HLA-DR and intercellular adhesion molecule-1 (ICAM-1) induced by IFN-gamma, compared to actively growing TGF-alpha/EGF treated keratinocytes. These results suggest that rapidly proliferating keratinocytes exposed to TGF-alpha/EGF but not SM-C are capable of altering their response to IFN-gamma by decreasing their number of cell surface high affinity receptors for IFN-gamma.