The strong societal urge to reduce the use of experimental animals, and the biological differences between rodent and human skin, have led to the development of alternative models for healthy and diseased human skin. However, the limited availability of primary keratinocytes to generate such models hampers large-scale implementation of skin models in biomedical, toxicological, and pharmaceutical research. Immortalized cell lines may overcome these issues, however, few immortalized human keratinocyte cell lines are available and most do not form a fully stratified epithelium. In this study we compared two immortalized keratinocyte cell lines (N/TERT1, N/TERT2G) to human primary keratinocytes based on epidermal differentiation, response to inflammatory mediators, and the development of normal and inflammatory human epidermal equivalents (HEEs). Stratum corneum permeability, epidermal morphology, and expression of epidermal differentiation and host defence genes and proteins in N/TERT-HEE cultures was similar to that of primary human keratinocytes. We successfully generated N/TERT-HEEs with psoriasis or atopic dermatitis features and validated these models for drug-screening purposes. We conclude that the N/TERT keratinocyte cell lines are useful substitutes for primary human keratinocytes thereby providing a biologically relevant, unlimited cell source for in vitro studies on epidermal biology, inflammatory skin disease pathogenesis and therapeutics.