Psoriasis is a chronic inflammatory skin disease characterized by hyperplasia of the epidermis (acanthosis), infiltration of leukocytes into both the dermis and epidermis, and dilation and growth of blood vessels. The underlying cause of the epidermal acanthosis in psoriasis is still largely unknown. Recently, interleukin (IL)-23, a cytokine involved in the development of IL-17-producing T helper cells (T(H)17 cells), was found to have a potential function in the pathogenesis of psoriasis. Here we show that IL-22 is preferentially produced by T(H)17 cells and mediates the acanthosis induced by IL-23. We found that IL-23 or IL-6 can directly induce the production of IL-22 from both murine and human naive T cells. However, the production of IL-22 and IL-17 from T(H)17 cells is differentially regulated. Transforming growth factor-beta, although crucial for IL-17 production, actually inhibits IL-22 production. Furthermore, IL-22 mediates IL-23-induced acanthosis and dermal inflammation through the activation of Stat3 (signal transduction and activators of transcription 3) in vivo. Our results suggest that T(H)17 cells, through the production of both IL-22 and IL-17, might have essential functions in host defence and in the pathogenesis of autoimmune diseases such as psoriasis. IL-22, as an effector cytokine produced by T cells, mediates the crosstalk between the immune system and epithelial cells.