Transforming growth factor-alpha (TGF-alpha) is thought to be the major autocrine factor controlling growth in epidermal cells. To explore further the role of TGF-alpha in epidermal growth and differentiation, we used a human keratin K14 promoter to target expression of rat TGF-alpha cDNA to the stratified squamous epithelia of transgenic mice. Unexpectedly, the only regions of epidermis especially responsive to TGF-alpha overexpression were those that were normally thick and where hair follicle density was typically low. This included most, if not all, body skin from 2-day- to 2-week-old mice, and ear, footpad, tail, and scrotum skin in adult mice. In these regions, excess TGF-alpha resulted in thicker epidermis and more stunted hair growth. Epidermal thickening was attributed both to cell hypertrophy and to a proportional increase in the number of basal, spinous, granular, and stratum corneum cells. During both postnatal development and epidermal differentiation, responsiveness to elevated TGF-alpha seemed to correlate with existing epidermal growth factor (EGF) receptor levels, and we saw no evidence for TGF-alpha-mediated control of EGF receptor (EGFR) expression. In adults, no squamous cell carcinomas were detected, but benign papillomas were common, developing primarily in regions of mechanical irritation or wounding. In addition, adult transgenic skin that was still both sensitive to TGF-alpha and subject to mild irritation displayed localized regions of leukocytic infiltration and granular layer loss, characteristics frequently seen in psoriasis in humans. These unusual regional and developmental effects of TGF-alpha suggest a natural role for the growth factor in (1) controlling epidermal thickness during development and differentiation, (2) involvement in papilloma formation, presumably in conjunction with TGF-beta, and (3) involvement in psoriasis, in conjunction with some as yet unidentified secondary stimulus stemming from mild mechanical irritation/bacterial infection.