IFI27 is an interferon alpha-inducible protein found to be upregulated in lesional and non-lesional psoriatic skin in a gene array study. To further characterize its function, we studied by in situ hybridization whether IFI27 is expressed in psoriasis, other inflammatory skin diseases, and wound repair in vivo. We also examined its regulation by different growth factors and anti-psoriatic agents using quantitative RT-PCR (TaqMan). IFI27 mRNA expression was highly upregulated in lesional psoriatic epidermis and also detected in non-lesional keratinocytes. It was also expressed in lichen planus, chronic eczema, cutaneous squamous cell cancers, and during normal wound repair when IFI27 was found in the proliferating subpopulation of keratinocytes. A 3-17-fold upregulation of IFI27 mRNA expression was observed when keratinocytes were stimulated with IFN-gamma, TNF-alpha, or TGF-beta1 while retinoids and vitamin D downregulated its expression. Our results suggest that IFI27 is a novel marker of epithelial proliferation and cancer.