TR3 is an orphan member of the steroid/thyroid/retinoid nuclear receptor superfamily of transcription factors and it plays a pivotal role in regulating cell growth and apoptosis. The expression and function of TR3 in skin have not been well investigated. Using a cDNA expression assay, we discover that TR3 is significantly enriched in human telogen bulge compared with anagen bulb. Immunohistochemical staining confirms that TR3 is highly expressed in the bulge region of human hair follicles and it colocalizes with cytokeratin 15 (K15), an epithelial stem cell marker. To study the function of TR3 in the effect of androgens in keratinocytes, we treat HaCaT keratinocytes and primary human keratinocytes with dihydrotestosterone (DHT) and testosterone (T). The treated keratinocytes show a dose-dependent growth reduction to DHT and T. DHT increases the expression of TR3 in keratinocytes, associated with a concomitant increase of BAD and decrease of Bcl-2 expression. Knockdown TR3 expression by siRNA blocks the inhibitory effect of DHT on keratinocyte proliferation. Our results demonstrate that TR3 is localized to the stem cell compartment in the human hair follicles. Androgen increases TR3 expression in cultured keratinocytes. Our data suggest that TR3 mediates at least part of the inhibitory effect of androgens on keratinocytes.