Fas/Fas ligand-mediated lymphocyte apoptosis has been implicated in the suppression of immune responses and may cause immune privilege. Human corneas exhibit immune privilege and can be transplanted across allogeneic barriers without immunosuppressive therapy, perhaps, because corneal keratinocytes express Fas ligand. To characterize Fas and Fas ligand expression in skin, we examined expression by murine keratinocytes, dermal fibroblasts, melanocytes, and human umbilical endothelial cells. We also studied the regulation of Fas and Fas ligand in skin cells by retinoic acid, vitamin D₃, and dexamethasone as well as various cytokines. Among the molecules and cells tested, retinoic acid selectively upregulated the expression of Fas ligand molecule by fibroblasts. Retinoic acid-induced Fas ligand⁺ fibroblasts killed Fas⁺ target cells, and this killing was blocked by anti-Fas ligand antibody. The function of Fas ligand on dermal fibroblasts in vivo was tested in a cutaneous allograft system. Histoincompatible BALB/C mouse (H-2d) donor skin was grafted on to allogeneic C57BL/6 mice (H-2b). Daily local injection of retinoic acid blocked inflammation and extended graft survival for more than 10 d. Injection of retinoic acid into Fas ligand mutated gld/gld donor skin did not prevent leukocyte infiltration into the allograft or prolong graft survival. These experiments indicate that, in skin, retinoic acid selectively increases Fas ligand expression by fibroblasts and that retinoic acid has potent Fas/Fas ligand-dependent immunosuppressive activity.