We have characterized an unusual cell phenotype in third passage cultures of a human keratinocyte strain derived from newborn foreskin epidermis. The cells had the same DNA fingerprint pattern as the second passage, morphologically normal, keratinocytes; they formed desmosomes and expressed the keratin profile characteristic of normal keratinocytes in culture. However, unlike normal keratinocytes, the cells did not grow as compact colonies and did not stratify or undergo terminal differentiation, even after TPA treatment or suspension culture. For these reasons we named them ndk for "nondifferentiating keratinocytes." The ndk cells also differed from normal keratinocytes in that they did not require a feeder layer and were not stimulated by cholera toxin to proliferate. The ndk cells had an absolute requirement for hydrocortisone and their growth rate was increased when epidermal growth factor was added to the medium. Although ndk failed to undergo terminal differentiation in culture, they were not transformed, since they were still sensitive to contact inhibition of growth, did not proliferate in soft agar, and had a limited lifespan in culture. The appearance of the ndk phenotype was correlated with a doubling of chromosome number and the presence of a lp marker chromosome. We suggest that these cells are a useful experimental adjunct to cultures of normal keratinocytes, in which proliferation and terminal differentiation are tightly coordinated, because in ndk cells there appears to be a block in terminal differentiation.