Atopic dermatitis is an inflammatory skin disease that affects approximately 20% of children worldwide. Left untreated, the barrier function of the skin is compromised, increasing susceptibility to dehydration and infection. Despite its prevalence, its multifactorial nature has complicated the unraveling of its etiology. We found that chronic loss of epidermal caspase-8 recapitulates many aspects of atopic dermatitis, including a spongiotic phenotype whereby intercellular adhesion between epidermal keratinocytes is disrupted, adversely affecting tissue architecture and function. Although spongiosis is generally thought to be secondary to edema, we found that suppression of matrix metalloproteinase-2 activity is sufficient to abrogate this defect. p38 MAPK induces matrix metalloproteinase-2 expression to cleave E-cadherin, which mediates keratinocyte cohesion in the epidermis. Thus, the conditional loss of caspase-8, which we previously found to mimic a wound response, can be used to gain insights into how these same wound-healing processes are commandeered in inflammatory skin diseases.