Thrombin receptor (ThrR) and protease-activated receptor-2 (PAR-2) are members of a unique G protein-coupled receptor family, which are characterized by the unveiling of a tethered peptide ligand upon proteolysis of their NH2 terminus. We have previously shown that cultured human basal keratinocytes express both receptors (R.J. Santulli et al., Proc. Natl. Acad. Sci. USA, 92: 9151-9155, 1995); however, their functional role in epidermal physiology has yet to be described. In the present study, we determined the effects of receptor activation on keratinocyte cell growth and differentiation using thrombin (selective for ThrR), SLIGRL (selective for PAR-2), and SFLLRN (stimulates ThrR and PAR-2), as agonists. ThrR stimulation enhanced cell growth in a dose-dependent manner in the absence of growth factors (epidermal growth factor and bovine pituitary extract). In contrast, under the same conditions, activation of PAR-2 led to the inhibition of cell growth. This inhibitory activity by PAR-2 activation was also observed in the presence of growth factors. Activation of both receptors diminished protein expression of the differentiation marker transglutaminase type 1 induced by either calcium or IFN-gamma. Calcium-induced involucrin expression was also decreased. These results indicate that PAR-2 and ThrR differentially modulate keratinocyte function and may provide an important regulatory function in the epidermis by altering the functional state of keratinocytes.