Interleukin (IL)-38 is a member of the IL-1 cytokine family, with the highest expression in differentiating keratinocytes and reported anti-inflammatory activity. However, little data are available regarding its biological functions such as inflammation, proliferation and differentiation in human keratinocytes. We demonstrate by immuno-staining that IL-38 is produced in multiple cell types of the skin and that IL-38 protein levels are downregulated in skin pathologies such as psoriasis and atopic dermatitis. Protein and mRNA quantification showed that IL-38 endogenous expression correlates with the state of keratinocyte differentiation. IL-38 ectopic overexpression in keratinocyte inhibits their proliferation and promotes their differentiation. Surprisingly, while our results did not demonstrate a significant anti-inflammatory activity of IL-38 in keratinocytes, IL-38 partially inhibited the inflammatory response in fibroblasts. Overall, our results indicate that IL-38 can act independently of the activation of the immune system and directly affect the epidermis. Our data point to an importance of keratinocyte-derived IL-38 in skin homeostasis and pathologies characterized by epidermal alterations.