We have previously demonstrated that the EP1 subtype of PGE2 receptor is expressed in the differentiated compartment of normal human epidermis and is coupled to intracellular calcium mobilization. We therefore hypothesized that the EP1 receptor is coupled to keratinocyte differentiation. In in vitro studies, radioligand binding, RT-PCR, immunoblot and receptor agonist-induced second messenger studies demonstrate that the EP1 receptor is up-regulated by high cell density in human keratinocytes and this up-regulation precedes corneocyte formation. Moreover, two different EP1 receptor antagonists, SC51322 and AH6809, both inhibited corneocyte formation. SC51322 also inhibited the induction of differentiation-specific proteins, cytokeratin K10 and epidermal transglutaminase. We next examined the immunolocalization of the EP1 receptor in non-melanoma skin cancer in humans. Well-differentiated SCCs exhibited significantly greater membrane staining, while spindle cell carcinomas and BCCs had significantly decreased membrane staining compared with normal epidermis. This data supports a role for the EP1 receptor in regulating keratinocyte differentiation.