We assessed expression of IL-20 and its receptors in psoriasis, given the recent implication of IL-20 in epidermal hyperplasia. Psoriatic lesional (LS) skin consistently expressed more IL-20 mRNA than nonlesional (NL) skin. Immunoreactivity to IL-20 protein was greater in LS tissue and mainly localized to infiltrating CD68⁺/CD11c⁺ (myeloid-derived) dermal leukocytes. Because this contrasted with earlier reports of a keratinocyte source, we assessed IL-20 mRNA expression in a variety of cells in vitro, and confirmed a myeloid-derived cellular source (monocytes). Plastic adhesion, activation of β2 integrins, and incubation with tumor necrosis factor-α stimulated expression in these cells. IL-20 receptor (IL-20R)α and IL-20Rβ mRNA was decreased in LS versus NL skin, which also contrasted with earlier findings. To investigate the relationship between IL-20 and disease activity, we examined psoriasis patients treated with the CD2-targeted agent alefacept. In therapeutic responders, lesional IL-20 mRNA decreased to NL levels, suggesting that CD2⁺ leukocytes may proximally regulate IL-20. Finally, to assess IL-20 function, we used microarrays to screen IL-20-treated keratinocytes, which demonstrated upregulation of disease-related and IFN-γ-induced genes. Hence, IL-20 may influence inflammation through IFN-like effects. Together, these data indicate that IL-20 may be an important effector cytokine in psoriasis, and that its inhibition may represent a potential therapeutic target.