Keratinocyte growth factor (KGF) is a paracrine mediator of epithelial cell growth. To examine the direct effects of KGF on the morphogenesis of the epidermis, we generated skin equivalents in vitro by seeding human keratinocytes on the papillary surface of acellular dermis and raising them up to the air-liquid interface. KGF was either added exogenously or expressed by keratinocytes via a recombinant retrovirus encoding KGF. KGF induced dramatic changes to the 3-dimensional organization of the epidermis including pronounced hyperthickening, crowding, and elongation of the basal cells, flattening of the rete ridges, and a ripple-like pattern in the junction of stratum corneum and granular layers. Quantitative immunostaining for the proliferation antigen, Ki67, revealed that in addition to increasing basal proliferation, KGF extended the proliferative compartment by inducing suprabasal cell proliferation. KGF also induced expression of the integrin alpha 5 beta 1 and delayed expression of keratin 10 and transglutaminase. However, barrier formation of the epidermis was not disrupted. These results demonstrate for the first time that a single growth factor can alter the 3-dimensional organization and proliferative function of an in vitro epidermis. In addition to new strategies for tissue engineering, such a well-defined system will be useful for analyzing growth factor effects on the complex links between cell proliferation, cell movement and differentiation within a stratified tissue.