A pentapeptide, pyroGlu-Glu-Asp-Ser-GlyOH, was previously isolated from mouse skin and shown to inhibit reversibly proliferation of murine keratinocytes, both in intact skin and in culture. In the present report we have shown that proliferation of normal human keratinocytes in culture is also inhibited by the pentapeptide, whether the cells are grown under standard conditions or prevented from stratifying in medium containing a low concentration of calcium ions. An SV40-transformed line of human keratinocytes, SVK14, was completely insensitive to the pentapeptide and a line derived from a squamous cell carcinoma of the oral cavity, SCC-9, was less sensitive than the normal cells. The effect of the pentapeptide on terminal differentiation was determined by measuring the proportion of cells expressing involucrin after a single dose or repeated doses of the pentapeptide: no consistent change in the number of terminally differentiating cells was observed. Cell extracts and conditioned medium from all three cell types contained the epidermal pentapeptide, suggesting a role for the peptide in both autocrine (normal keratinocytes) and paracine (SVK14, SCC-9) growth control. A proportion of the pentapeptide isolated from conditioned medium was phosphorylated; since it was as active as the non-phosphorylated form, when assayed on mouse epidermis, the role of phosphorylation remains to be determined.