NF-kappaB signaling plays an important role in skin development and epidermal growth control. Moreover, inhibition of NF-kappaB signaling in murine epidermal keratinocytes in vivo, by expression of a keratin 5 (K5)-directed superrepressor form of inhibitor of NF-kappaB (IkappaBalpha), results in an inflammatory response characterized by a massive dermal infiltration of neutrophils, epidermal hyperplasia, and a rapid development of aneuploid squamous cell carcinomas (SCC). We now show that by crossing K5-IkappaBalpha mice onto a tumor necrosis factor receptor 1(Tnfr1)-null background, both the inflammatory and the tumorigenic responses are blocked. The specificity of the block is illustrated by the fact that K5-IkappaBalpha mice lacking the IL-1 receptor type 1 (Il1r1) develop inflammation and squamous cell carcinomas. Reconstitution of lethally irradiated K5-IkappaBalpha/Tnfr1(-/-) mice with Tnfr1(+/-) bone-marrow does not induce the inflammatory or the tumorigenic phenotype, indicating a critical dependence on Tnfr1-mediated signaling in skin cells or nonimmune cells. Our results suggest a critical role of local Tnfr1-mediated signaling and associated inflammatory response cooperating with repressed keratinocyte NF-kappaB signaling in driving skin cancer development.