I nterleukin (IL)-1 induces a cascade of secondary cytokines in a large number of cell types in vitro, including monocytes, fibroblasts, synovial cells, and keratinocytes. Although it has been proposed that autocrine or paracrine activation of such cells by IL- 1 in situ could orchestrate a local inflammatory response, formal proof for such an hypothesis has been lacking. In an attempt to lower the threshold for secondary cytokine production in these cells in response to IL-1, we have generated transgenic mice (designated IR10) which overexpress functional type 1 IL-1 receptor in basal layer of epidermis keratinocytes. As predicted, keratinocytes from these animals were substantially more responsive to exogenous IL-1 than nontransgenic keratinocytes when stimulated in vitro. When challenged with known inducers of keratinocyte IL-1 synthesis and release, skin of IR10 mice exhibited an exaggerated inflammatory response, characterized by epidermal hyperplasia and an acute dermal inflammatory cell infiltrate. In this setting, the secondary epidermal cytokines gro-alpha and GM-CSF were strongly induced in transgenic epidermis but not in control skin. To confirm that these changes were indeed related to IL-1 mediated activation pathways, IR10 mice were crossed to a distinct line of transgenic mice that overexpress 17-kD IL-l alpha in basal keratinocytes. Double transgenic mice derived from this cross breeding experiment developed spontaneous inflammation of the skin, similar in appearance to that induced by PMA, both histologically and macroscopically, and distinct from that seen in either parental strain spontaneously. Furthermore, secondary cytokines were more strongly induced in the double transgenic than in either parental strain. These findings conclusively demonstrate the potential for functional autocrine pathways of keratinocyte activation mediated by IL-1 alpha in vivo, and suggest that level of expression of type 1 IL-1 receptor may function as a significant control point in physiologic IL-1 mediated autocrine pathways.