Abnormal epidermal proliferation and differentiation characterize the inflammatory skin disease psoriasis. Here we demonstrate that expression of PPARδ mRNA and protein is markedly upregulated in psoriatic lesions and that lipoxygenase products accumulating in psoriatic lesions are potent activators of PPARδ. The expression levels of NF-κB p50 and p65 were not significantly altered in lesional compared with nonlesional psoriatic skin. In the basal layer of normal epidermis both p50 and p65 were sequestered in the cytoplasm, whereas p50, but not p65, localized to nuclei in the suprabasal layers, and this distribution was maintained in lesional psoriatic skin. In normal human keratinocytes PPAR agonists neither impaired IL-1β-induced translocation of p65 nor IL-1β-induced NF-κB DNA binding. We show that PPARδ physically interacts with the N-terminal Rel homology domain of p65. Irrespective of the presence of agonists none of the PPAR subtypes decreased p65-mediated transactivation in keratinocytes. In contrast p65, but not p50, was a potent repressor of PPAR-mediated transactivation. The p65-dependent repression of PPARδ- but not PPARα- or PPARγ-mediated transactivation was partially relieved by forced expression of the coactivators p300 or CBP. We suggest that deficient NF-κB activation in chronic psoriatic plaques permitting unabated PPARδ-mediated transactivation contributes to the pathologic phenotype of psoriasis.