The mechanisms of action of marketed TNF-blocking drugs in lesional tissues are still incompletely understood. Because psoriasis plaques are accessible to repeat biopsy, the effect of TNF/lymphotoxin blockade with etanercept (soluble TNFR) was studied in ten psoriasis patients treated for 6 months. Histological response, inflammatory gene expression, and cellular infiltration in psoriasis plaques were evaluated. There was a rapid and complete reduction of IL-1 and IL-8 (immediate/early genes), followed by progressive reductions in many other inflammation-related genes, and finally somewhat slower reductions in infiltrating myeloid cells (CD11c+ cells) and T lymphocytes. The observed decreases in IL-8, IFN-γ-inducible protein-10 (CXCL10), and MIP-3α (CCL20) mRNA expression may account for decreased infiltration of neutrophils, T cells, and dendritic cells (DCs), respectively. DCs may be less activated with therapy, as suggested by decreased IL-23 mRNA and inducible NO synthase mRNA and protein. Decreases in T cell-inflammatory gene expression (IFN-γ, STAT-1, granzyme B) and T cell numbers may be due to a reduction in DC-mediated T cell activation. Thus, etanercept-induced TNF/lymphotoxin blockade may break the potentially self-sustaining cycle of DC activation and maturation, subsequent T cell activation, and cytokine, growth factor, and chemokine production by multiple cell types including lymphocytes, neutrophils, DCs, and keratinocytes. This results in reversal of the epidermal hyperplasia and cutaneous inflammation characteristic of psoriatic plaques.