The conversion of cultured basal keratinocytes to the spinous and granular cell phenotypes seen in the skin can be stimulated by raising the levels of extracellular calcium. Here we show that AP-1 DNA binding activity is very low in primary cultures of basal keratinocytes, but that this activity is induced 24-48 h after increasing the concentration of extracellular calcium from 0.05 to 0.12 mM. As such, the induction of AP-1 DNA binding activity correlates with events occurring during the terminal stages of keratinocyte differentiation. Calcium-induced AP-1 DNA binding complexes consist of Fra-1, Fra-2, c-Jun, JunB and JunD and are independent of c-Fos, since the induction of DNA binding activity and the composition of the AP-1 binding complexes are identical in differentiating keratinocytes derived from c-fos null and wild type mice. The formation of calcium-induced AP-1 binding complexes is regulated by protein kinase C (PKC) and requires a functional PKCalpha isozyme, as determined through pharmacological down-modulation of specific PKC isozymes in differentiating keratinocytes. Moreover, PKC activation is required for the increased expression of Fra-2, JunB and JunD in the nucleus of differentiating cells in vitro. This observation provides a link between the obligate activation of PKC during keratinocyte differentiation and the nuclear response required to alter gene expression. In vivo expression patterns suggest that the predominant AP-1 heterodimer in the granular layer consists of Fra-2 and JunB while a JunD and Fra-1 complex predominates the spinous layer of mouse epidermis. These findings suggest distinct functions for different AP-1 proteins in the regulation of events related to keratinocyte maturation.