Keratinocytes contribute to melanocyte transformation by affecting their microenvironment, in part through the secretion of paracrine factors. Here we report a loss of expression of nuclear receptor RXRα in epidermal keratinocytes during human melanoma progression. In the absence of keratinocytic RXRα, in combination with mutant Cdk4, cutaneous melanoma was generated that metastasized to lymph nodes in a bigenic mouse model. Expression of several keratinocyte-derived mitogenic growth factors (Et-1, Hgf, Scf, α-MSH and Fgf 2 ) was elevated in skin of bigenic mice, whereas Fas, E-cadherin and Pten, implicated in apoptosis, cellular invasion and melanomagenesis, respectively, were downregulated within the microdissected melanocytic tumors. We demonstrated that RXRα is recruited on the proximal promoter of both Et-1 and Hgf, possibly directly regulating their transcription in keratinocytes. These studies demonstrate the contribution of keratinocytic paracrine signaling during the cellular transformation and malignant conversion of melanocytes.