Local estrogen metabolism may play an important role in modulating cell development in peripheral tissues such as breast, adipose, and bone. C19 androgens are converted to C18 estrogens by the enzyme aromatase, overexpression of which is associated with breast cancer. Interconversion of active estradiol (E2) to inactive estrone is controlled by various isoforms of the enzyme 17beta-hydroxysteroid dehydrogenase (17betaHSD). We have studied the expression of these two enzymes in human keratinocytes and report rapid changes in 17betaHSD activity in response to treatment with 1,25-dihydroxyvitamin D3 [1,25-(OH)2D3]. Keratinocytes cultured in serum-free medium showed aromatase activity of 2.5 fmol/h x mg cell protein, which was unaffected by any culture treatment. A much higher level of 17betaHSD activity was observed in the keratinocytes, predominantly conversion of E2 to estrone (approximately 120 pmol/h x mg cell protein). This inactivation of E2 increased in a dose-dependent fashion after treatment of the cells with antiproliferative doses of 1,25-(OH)2D3 (0.1-200 nM). The effect of 1,25-(OH)2D3 on 17betaHSD activity was enhanced by simultaneous treatment with dexamethasone, which also increased the antiproliferative action of 1,25-(OH)2D3. Reverse transcription-PCR and Northern analysis showed that keratinocytes expressed messenger RNA for three 17betaHSD isoenzymes (types I, II, and IV). Treatment with 1,25-(OH)2D3 (10 nM for 20 h) resulted in the up-regulation of messenger RNA levels for type 2 17betaHSD. Further RNA studies combined with E2 binding experiments demonstrated the presence of estrogen receptors in the cultured keratinocytes. These data indicate that keratinocytes are potential targets for systemically or locally produced estrogens, which may, in turn, play a key role in the development of normal skin. In particular, we propose that 17betaHSD isoenzymes are key target genes for 1,25-(OH)2D3 in keratinocytes and may be an important feature of the antipsoriatic effects of vitamin D and its analogs.