Epidermal cells were isolated from adult inbred SENCAR (SSIN) mice and separated by density-gradient centrifugation. The cells were pooled into three fractions shown by previous work to differ in their state of differentiation and proliferative potential. The three fractions were examined for their capacity to metabolize exogenous 14C-arachidonic acid (AA) into prostaglandins (PG) and hydroxyeicosatetraenoic acids (HETE). Cells found in the upper two fractions, which are less dense, have less proliferative potential in vitro, and are more differentiated than cells in the lower more dense fraction, are much more active in producing PG from exogenous AA than are the more dense cells. This was observed in intact cells as well as cells disrupted by freeze-thawing following density separation. The same relationship was found for HETE production in that cytoplasmic preparations from the two fractions containing the less dense cells were much more active in the production of HETE than cytoplasmic preparations from the more dense fraction. The two upper fractions differed little from each other in the production of PG or HETE. These results indicate the presence of higher levels of active cyclooxygenase and lipoxygenases in fractions containing the less dense, more differentiated cells than in the fraction containing the more dense, less differentiated cells which are highly enriched for basal keratinocytes.