Abstract Clinical improvement of psoriasis induced by IL-4 treatment has been ascribed to changes in dermal inflammatory cells, such as activation of Th2 cells and tolerization of dendritic cells by suppressing IL-23 production. The pathologic epidermal alterations in psoriatic lesional skin include increased epidermal expression of IL-1β, IL-6, S100A7, and human β-defensin 2 (hBD2) and a downregulated expression of the epidermal transcription factor GATA3. Effects of IL-4 on the epidermal compartment of psoriasis lesions were not previously investigated. Therefore, we investigated whether IL-4 directly affects abovementioned psoriatic markers in the epidermal compartment. We cultured freshly isolated psoriatic epidermal cells, whole psoriatic and healthy skin biopsies, human keratinocytes and Langerhans cells with IL-4. The secretion of IL-1β and IL-6 by psoriatic epidermal cells was inhibited by IL-4 via transcriptional and posttranscriptional mechanisms, respectively. In normal skin, IL-4 inhibited IL-1β- and IL-17A–induced hBD2 expression in vitro. In addition, IL-4 reduced the protein expression of hBD2 in psoriatic skin biopsies and induced phospho-STAT6 protein. Epidermal GATA3 mRNA and protein were significantly upregulated by IL-4 in epidermal cells and keratinocytes. Our data argue that IL-4 improves psoriasis not only via modification/induction of Th2 cells and type II dendritic cells, but also via direct inhibition of inflammatory cytokines in resident IL-4R–expressing epidermal cells and thereby alters the psoriatic skin phenotype toward a healthy skin phenotype.