Insulin-like growth factor (IGF)-binding protein 7 (IGFBP7) belongs to the IGFBP superfamily, which is involved in the regulation of IGF and insulin signaling. Recently, a global gene expression study revealed that IGFBP7 is downregulated in the psoriatic epidermis, with UVB phototherapy restoring its expression to normal. In the present study, we confirmed that IGFBP7 expression is decreased in psoriatic lesions. Given the previous data suggesting a role for IGFBP7 in the control of cancer cell growth, we investigated its involvement in the regulation of keratinocyte (KC) proliferation and differentiation, which are abnormal in psoriasis. To model IGFBP7 downregulation in vitro, we used IGFBP7-specific small interfering RNA or small hairpin RNA-expressing lentiviral vectors in HaCaT cells or primary human KCs. Downregulation of IGFBP7 was found to markedly enhance KC proliferation in both systems, was associated with a significant decrease in KC susceptibility to tumor necrosis factor-alpha-induced apoptosis, but did not affect senescence. Downregulation of IGFBP7 was also shown to block expression of genes associated with calcium-induced differentiation of human KCs. Finally, recombinant IGFBP7 was found to inhibit KC proliferation and enhanced their apoptosis. These data position IGFBP7 as a regulator of KC proliferation and differentiation, suggesting a potential role for this protein in the pathophysiology and treatment of hyperproliferative dermatoses such as psoriasis.