The skin forms the first barrier against physical, biological and chemical insults and is essential for prevention of dehydration. To maintain this function epidermal keratinocytes undergo differentiation. During differentiation, the gene expression programs in keratinocytes switch from maintenance of cell proliferation to terminal differentiation. Calcium gradient formed between the basal and upper epidermal layers is a major factor underlying induction of terminal differentiation in keratinocytes. In addition, skin homeostasis relies on well- orchestrated intercellular communications mediated by cytokines that are produced by keratinocytes and other skin resident cells. We have identified that transcription factor FOXQ1 (a member of the Forkhead Box family of proteins) utilizes a novel, rheostat-like mechanism of transcriptional regulation of keratinocyte differentiation. Thus, in presence of low extracellular calcium, FOXQ1 repressed genes associated with epidermal differentiation in normal human keratinocytes (NHKs) and immortalized human keratinocytes (HaCaT). On the contrary, in calcium-treated (i.e. differentiation-induced) NHK and HaCaT cells, FOXQ1 activated the same set of genes. Therefore, in Specific Aim 1, we will identify the mechanisms underlying transcriptional regulation by FOXQ1 of keratinocyte differentiation. In addition, we demonstrated that under normal conditions, depletion of FOXQ1 in cultured keratinocytes decreased whereas its overexpression increased cell proliferation. Moreover, Foxq1-/- mice demonstrated decreased epidermal hyperplasia in response to treatment with imiquimod which induces psoriasis-like phenotypes in mouse epidermis. Therefore, in Specific Aim 2, we will generate keratinocyte-specific Foxq1 knock-out mice and identify the mechanisms of FOXQ1 regulation by pro-inflammatory cytokines and the role of Foxq1 in regulation of keratinocyte hyper-proliferation.