IL-1beta, a major mediator of inflammatory and immunologic skin disease, undergoes post-translational site-specific cleavage by a novel cysteine protease termed IL-1beta-converting enzyme (ICE). Although in human skin keratinocytes produce significant amounts of the 31-kDa IL-1beta precursor protein, they fail under nonpathologic conditions to convert it to the 17.5-kDa bioactive form. In this study, we examined whether haptens and inflammatory agents might serve as stimuli for ICE activity in human keratinocytes, and, if so, whether ICE activity might precipitate enzymatic processing of IL-1beta to its 17.5-kDa form. Baseline levels of ICE mRNA were detected in keratinocyte cultures devoid of Langerhans cells and were up-regulated by nontoxic concentrations of the reactive hapten urushiol and by the irritant chemicals sodium lauryl sulfate and PMA. Although untreated keratinocytes expressed the 31-kDa form of the protein, 17.5-kDa IL-1beta was easily detected in keratinocytes and keratinocyte supernatants treated with either urushiol or the irritant chemicals. Enzymatic conversion from the 31-kDa to the 17.5-kDa form of IL-1beta was blocked by addition of a highly specific aldehyde inhibitor that contained a tetrapeptide recognition sequence specific for ICE, but not by an aldehyde inhibitor of a related ICE-like cysteine protease. Induction of IL-1beta-converting enzyme by immunologic and inflammatory stimuli may be one of the key regulatory elements in the pathogenesis of allergic and irritant contact hypersensitivity.