Balanced keratinocyte proliferation and differentiation resulting in regular tissue organization strictly depend on dermal support. Organotypic cultures represent biologically relevant in vitro models to study the molecular mechanism of the underlying dermal-epidermal interactions. To mimic the state of resting fibroblasts in the dermis, postmitotic (irradiated) fibroblasts were incorporated in the collagen matrix, where they typically support epidermal proliferation and tissue organization. In coculture with keratinocytes, fibroblasts exhibit an enhanced expression of keratinocyte growth factor and the interleukin-1 receptor (type I), which further increase with culture time. In cocultured keratinocytes, keratinocyte growth factor receptor as well as RNA expression and protein release of interleukin-1alpha and interleukin-1beta are upregulated. We hypothesized that the modulated cytokine expression represents a basic mechanism for keratinocyte growth regulation. The functional significance of this double paracrine pathway, i.e., induction of keratinocyte growth factor expression in fibroblasts by keratinocytes via release of interleukin-1, was confirmed by interfering with both signaling elements: (i) interleukin-1-neutralizing antibodies and interleukin-1 receptor antagonist significantly inhibited keratinocyte growth factor release, keratinocyte proliferation, and tissue formation comparable to the effect produced by keratinocyte-growth-factor-blocking antibodies; (ii) addition of keratinocyte growth factor to cocultures with inactivated interleukin-1 pathway completely reverted growth inhibition; (iii) in organotypic cocultures with subthreshold fibroblast numbers both interleukin-1 and keratinocyte growth factor restored the impaired epidermal morphogenesis. Thus, epidermal tissue regeneration in organotypic cocultures is mainly regulated by keratinocyte-derived interleukin-1 signaling, which induces keratinocyte growth factor expression in cocultured fibroblasts. This demonstrates a novel role for interleukin-1 in skin homeostasis substantiating data from wound healing studies in vivo.