Lesions of the common inflammatory skin disease psoriasis are characterized by epidermal hyperproliferation, leucocyte adhesion molecule expression and leucocyte infiltration. The local release of proinflammatory cytokines. such as TNF‐α, may play an important role in the induction of these events. We have, therefore, analysed aqueous extracts of lesional and uninvolved (clinically normal) stratum corneum for the presence of TNF‐α immunoreactivity and biological activity. TNF‐α immunoreactivity and bioactivity were consistently higher in lesional compared with uninvolved samples. By using an anti‐TNF‐α neutralizing antibody it was demonstrated that the biological activity measured was due to the presence of TNF‐α alone. Concentrations of soluble TNF receptors (p55 and p75) were also higher in lesional stratum corneum extracts, with the p55 form predominating. The plasma of psoriatic patients was also found to contain elevated concentrations of soluble p55 compared with normal controls. These results confirm the presence of immunoreactive TNF‐α and, for the first time, conclusively demonstrate TNF‐α biological activity and quantifiable concentrations of soluble TNF receptors (p55 and p75) in lesional psorialic samples. TNF‐α recovery from stratum corneum probably reflects synthesis in deeper, viable layers, where il is likely lo exert its biological effects. Local and systemic release of soluble TNF receplors, in particular p55, may serve to regulate the effects of TNF‐α in psoriasis.