Nerve growth factor (NGF) influences the key pathological events of psoriasis: keratinocyte proliferation, angiogenesis, and T-cell activation. We have systematically examined the kinetics of NGF expression, keratinocyte proliferation, and migration of T lymphocytes in the epidermis in Koebner-induced developing psoriatic plaques. In skin traumatized by the tape-stripping method (n = 12), a marked up-regulation of NGF in Koebner-positive lesions (n = 7) was observed 24 hours after trauma. Synthesis of NGF reached its maximum level in the 2nd week. Furthermore, cultured keratinocytes from nonlesional skin of psoriasis patients produced 10 times higher levels of NGF compared with keratinocytes from healthy individuals. To substantiate the in vivo effect of NGF secreted by keratinocytes in psoriatic plaques, we studied psoriatic plaques and normal human skin in a SCID-human skin xenograft model. The transplanted psoriatic plaques demonstrated marked proliferation of NGF-R (p75)-positive nerve fibers compared with only a few nerves in the transplanted normal human skin. Our results demonstrate that 1) in a developing psoriatic lesion, up-regulation of NGF together with keratinocyte proliferation are early events and precede epidermotropism of T lymphocytes; 2) keratinocytes in patients with psoriasis are primed to produce elevated levels of NGF; and 3) NGF synthesized by these keratinocytes is functionally active.