Keratinocytes in culture synthesize and respond to interleukin 1 (IL-1). We have measured surface IL-1 receptor (IL-1R) on keratinocytes in culture using radiolabeled IL-1 binding assays. Surface IL-1R levels are less than 2000 receptors per cell in postconfluent cultures but increase 9- to 20-fold 24 hr after treatment with phorbol 12-myristate 13-acetate (PMA) at 10 ng/ml or after raising the extracellular Ca2+ concentration to 2 mM. This induction of surface IL-1R can be blocked by the addition of retinoic acid and parallels induction of squamous differentiation markers. These results imply that IL-1R levels may be related to the degree of differentiation of these cells. In parallel studies IL-1 protein levels were determined by bioassay and by Western blotting (immunoblots). All detectable IL-1 protein and essentially all IL-1 activity was cell-associated. Although constitutive levels of IL-1 biological activity and protein are significant in these cultures, IL-1 levels increase when either PMA or retinoic acid alone are added to cultures. IL-1 does not increase when PMA and retinoic acid are added simultaneously to cultures; nor is it induced when extracellular Ca2+ concentrations are raised to 2 mM. Thus, cell-associated IL-1 levels do not necessarily parallel surface IL-1R levels in these cultures. Taken together, these results demonstrate that IL-1 and surface IL-1R levels are differentially and complexly regulated in keratinocyte cultures. Possible implications of these results in terms of normal and abnormal regulation of proliferation and differentiation are discussed.