Cyclic AMP levels have been determined for the first time in isolated keratinocytes. Values were more reproducible than those reported using epidermal slices. Evidence is presented to show that damage to hormone receptors is minimal. Other observations include the following: (1) Keratinocytes from psoriatic lesions showed reduced 'resting' levels of cyclic AMP as well as a diminished response to adrenaline. (2) Cyclic AMP levels were maximal in the basal cells, falling dramatically in fully differentiated keratinocytes. (3) The topical application of a corticosteroid (fluocinolone acetonide) did not modulate the response of adenyl cyclase to hormonal stimulation.