Keratinocytes are involved in protecting the body from infections and environmental challenges, but also in inflammatory conditions like psoriasis. DNA has emerged as a potent stimulator of innate immune responses, but there is largely no information of how keratinocytes respond to cytosolic DNA. In this study, we report that human keratinocytes are tolerant to cytoplasmic DNA. However, if treated with inflammatory cytokines, keratinocytes gained the capacity to respond to DNA through a mechanism antagonized by the antimicrobial peptide LL37, proposed to be involved in activation and regulation of skin inflammation. The DNA sensor IFN-inducible protein 16 (IFI16) colocalized with DNA and the signaling molecule stimulator of IFN genes (STING) in the cytoplasm only in cytokine-stimulated cells, correlating with recruitment of the essential kinase TANK-binding kinase 1. Moreover, IFI16 was essential for DNA-driven innate immune responses in keratinocytes. Finally, IFI16 was upregulated in psoriasis skin lesions and localized to the cytoplasm in a subpopulation of cells. Collectively, this work suggests that inflammatory environments in the skin can lead to breakdown of tolerance for DNA in keratinocytes, which could contribute to the development of inflammatory diseases.