BACKGROUND: Human epidermis is renewed throughout life from stem cells in the basal layer of the epidermis. Signals from the surrounding keratinocytes influence the differentiation of the stem cells, but the nature of the signals is unknown. In many developing tissues, signalling mediated by the transmembrane protein Delta1 and its receptor Notch1 inhibits differentiation. Here, we investigated the role of Delta-Notch signalling in postnatal human epidermis. RESULTS: Notch1 expression was found in all living epidermal layers, but Delta1 expression was confined to the basal layer of the epidermis, with highest expression in those regions where stem cells reside. By overexpressing Delta1 or Delta(T), a truncated form of Delta1, in primary human keratinocytes and reconstituting epidermal sheets containing mixtures of Delta-overexpressing cells and wild-type cells, we found that cells expressing high levels of Delta1 or Delta(T) failed to respond to Delta signals from their neighbours. In contrast, wild-type keratinocytes that were in contact with neighbouring cells expressing Delta1 were stimulated to leave the stem-cell compartment and initiate terminal differentiation after a few rounds of division. Delta1 promoted keratinocyte cohesiveness, whereas Delta(T) did not. CONCLUSIONS: We propose that high Delta1 expression by epidermal stem cells has three effects: a protective effect on stem cells by blocking Notch signalling; enhanced cohesiveness of stem-cell clusters, which may discourage intermingling with neighbouring cells; and signalling to cells at the edges of the clusters to differentiate. Notch signalling in epidermal stem cells thus differs from other progenitor cell populations in promoting, rather than suppressing, differentiation.