Heat-stable antigen (HSA), expressed by various antigen-presenting cells (APC), has been described as a costimulatory molecule for CD4+ T cells. Recently, we observed that HSA also serves as an important costimulatory molecule on epidermal Langerhans cells (LC). During these studies, low levels of HSA staining were also detected on normal murine keratinocytes (KC). To investigate whether HSA also is involved in T-cell activation by KC, normal murine KC or the spontaneously transformed KC cell-line PAM 212 were treated with PDB or PMA to induce HSA-expression. FACS analyses showed induction of HSA expression on normal murine KC, as well as PAM 212 cells. In functional assays PDB or PMA-treated normal or transformed KC were far more potent inducers of primary allogeneic T-cell responses than untreated KC. Addition of anti-HSA-specific mAb 20C9 specifically inhibited the costimulatory activity of KC, an effect that was even more pronounced when CTLA-4Ig was added to the cultures. Cleavage of HSA on KC surfaces by a phosphoinositol-specific phospholipase C (PI-PLC) also significantly inhibited the costimulatory capacity of KC for naive CD4+ T cells. In aggregate, our data indicate that expression of HSA on activated KC contributes to the capacity of these cells to induce proliferation of allogeneic T cells.