Controversy exists whether the initiating events in psoriasis are primarily epidermal or dermal (vascular). To study this point, serial biopsies from 6 patients were taken from the periphery of individual plaques before, and at 1 to 3 day intervals during, Goeckerman and PUVA treatments. Part of the biopsy was studied by electron microscopy to determine the fine structure of the capillary loops and part was incubated with tritiated thymidine to determine the labeling index (LI) of the basal cells. Normal appearing buttock skin of 11 other psoriatic patients not under treatment was studied by identical methods. In 4 of the 6 treated patients, the capillary loops began to return toward normal 3 to 8 days before the LI began to decrease. Two patients did not show a return toward normal of either capillaries or LI during the period of the experiment. The LI was elevated in the normal appearing buttock skin of 6 of 11 untreated psoriatics. In 4 of the 6, the loops were normal arterial capillaries. We did not observe abnormal (venous) capillaries associated with a normal LI in the other 5 untreated patients. These data support the concept that the initiating factors in psoriasis are in the epidermis, but epidermal hyperplasia cannot occur without vascular proliferation. Understanding the factors responsible for shortening the capillary loops during epidermal normalization and for inhibition of capillary growth in the presence of an increased LI could lead to other ways of controlling psoriasis.