The limited life-span and irregularities in epidermal differentiation and barrier function that have restricted the utility of presently available skin culture models for pharmacological and toxicological studies indicate that further modifications of culture conditions are required for optimization of these models. In the present study epidermis reconstructed on de-epidermized dermis was used to investigate the effects of temperature and epidermal growth factor (EGF) on epidermal differentiation and lipogenesis. When cultured at 37°C, keratinocytes formed a well-differentiated epidermis whether EGF was present or not. However, the thickness of the epidermis, particularly of the stratum corneum, was higher in the presence of EGF. Both the differentiation-specific protein markers (keratins 1 and 10, involucrin and transglutaminase) and lipid markers (ceramides) were synthesized. EGF-induced increases in triglyceride content caused accumulation of lipid droplets within the stratum corneum which is indicative of a hyperproliferative effect of EGF. In the absence of EGF, a well-differentiated epidermis was generated at 33°C with a morphology showing a higher resemblance to native epidermis than cultures grown at 37°C. The stratum corneum was less compact and with practically no lipid droplets, irregularly shaped keratohyalin granules were abundant in the stratum granulosum, lamellar body extrusion was improved and the number of stratum corneum layers was reduced to normal levels. However, EGF supplementation had a deleterious effect on epidermal morphogenesis and differentiation of cultures grown at 33°C. The epidermis lacked a stratum granulosum and the stratum corneum contained a high number of nuclear remnants. The synthesis of the early specific protein differentiation markers (keratins 1 and 10) was suppressed on both the protein and mRNA levels without significant interference with the synthesis of late differentiation lipid markers, such as ceramides. From this observation it can be concluded that the synthesis of keratins associated with terminal differentiation is profoundly affected by the presence of EGF and is sensitive to temperature and that of ceramides is not. The finding that TGFα did not modulate the morphogenesis and synthesis of keratins 1 and 10 in cultures grown at 33°C indicates possible differences between the postreceptor binding processes of these EGF receptor ligands.