Flow cytometric analysis of primary ex vivo keratinocyte cultures demonstrated that stem cells, (beta 1 integrin+, keratin 1/keratin 10 [K1/K10-], proliferating cell nuclear antigen [PCNA-] [Bata-Csorgo, Zs., C. Hammerberg, J. J. Voorhees, and K. D. Cooper. 1993. J. Exp. Med. 178:1271-1281]) establish such cultures. This methodology also enabled the quantitation of synchronized recruitment of these cells from G0 into G1 of the cell cycle (PCNA expression), which preceded bright beta 1 integrin expression. (beta 1 integrinbright expression has been shown to be a characteristic feature of keratinocyte stem cells in culture (Jones, P. H., and F. M. Watt. 1993. Cell. 73:713-724). Using the above assay, we determined whether lesional T lymphocytes in psoriasis could be directly responsible for the induction of the stem cell hyperproliferation that is characteristic of this disease. Indeed, CD4+ T lymphocytes, cloned from lesional psoriatic skin and stimulated by immobilized anti-CD3 plus fibronectin, promoted psoriatic uninvolved keratinocyte stem cell proliferation via soluble factors. This induction appeared to be through accelerated recruitment of stem cells from their quiescent state (G0) into cell cycle. By contrast, normal keratinocyte stem cells exhibited no such growth stimulation. Supernatants exhibiting growth induction all contained high levels of GM-CSF and gamma-IFN, low IL-3 and TNF-alpha, and variable IL-4. Only anti-gamma-IFN antibody was able to neutralize growth stimulatory activity of the supernatants on psoriatic uninvolved keratinocyte stem cells. However, because recombinant gamma-IFN alone inhibited growth in this assay, these data suggest that, in psoriasis, gamma-IFN acts cooperatively with other growth factors in the immune induction of cell cycle progression by the normally quiescent stem cell keratinocytes.