The epithelial isoform of fibroblast growth factor receptor 2 (Fgfr2b) is essential for embryogenesis, and Fgfr2b-null mice die at birth. Using Cre-Lox transgenics to delete Fgfr2b in cells expressing keratin 5, we show that mice lacking epidermal Fgfr2b survive into adulthood but display striking abnormalities in hair and sebaceous gland development. Epidermal hyperthickening develops with age, and 10% of mutant mice develop spontaneous papillomas, demonstrating the role of Fgfr2b in post-natal skin development and in adult skin homeostasis. Mice lacking epithelial Fgfr2b show great sensitivity to chemical carcinogenic insult, displaying several oncogenic ha-ras mutations with dramatic development of papillomas and squamous cell carcinomas. Mutant mice have increased inflammation in the skin, with increased numbers of macrophages and gammadeltaT cells with abnormal morphology. Mutant skin shows several changes in gene expression, including enhanced expression of the pro-inflammatory cytokine interleukin 18 and decreased expression of Serpin a3b, a potential tumor suppressor. Thus we describe a novel role of Fgfr2b and provide the first evidence of a tyrosine kinase receptor playing a tumor suppressive role in the skin.