The immediate response to skin injury is the release of inflammatory signals. It is shown here, by use of cultures of primary keratinocytes from wild-type and PPARβ/δ^−/− mice, that such signals including TNF-α and IFN-γ, induce keratinocyte differentiation. This cytokine-dependent cell differentiation pathway requires up-regulation of the PPARβ/δ gene via the stress-associated kinase cascade, which targets an AP-1 site in thePPARβ/δ promoter. In addition, the pro-inflammatory cytokines also initiate the production of endogenous PPARβ/δ ligands, which are essential for PPARβ/δ activation and action. Activated PPARβ/δ regulates the expression of genes associated with apoptosis resulting in an increased resistance of cultured keratinocytes to cell death. This effect is also observed in vivo during wound healing after an injury, as shown in dorsal skin of PPARβ/δ^+/+ and PPARβ/δ^+/− mice.