Thymidine phosphorylase/platelet-derived endothelial cell growth factor (TPase/PD-ECGF) is a catabolic enzyme that has been shown to be chemotactic for endothelial cells in vitro and angiogenic in vivo. TPase/PD-ECGF expression is increased in a variety of tumors. In the skin, TPase is active in normal keratinocytes in vitro and in vivo. Our objective was to study the expression and localization of TPase/PD-ECGF by immunohistochemical analysis in normal skin and cutaneous tumors and to correlate this information with enzymatic activity of TPase. TPase/PD-ECGF expression was observed in keratinocytes with intense staining of the infundibulum of hair follicles but no staining of hair bulbs. Expression localized primarily to the nucleus of keratinocytes in the basal layer but was more intense and cytoplasrmic in suprabasal keratinocytes. Increased expression of TPase/PD-ECGF in differentiated cells was confirmed by in vitro studies of TPase activity. In cutaneous tumors, there was positive staining for TPase/ PD-ECGF in squamous cell carcinomas (10/10), eccrine poromas (3/4), eccrine syringomas (4/4), trichoepitheliomas (1/3), and tumors of the follicular infundibulum (2/3) and melanomas (5/8). There was no staining of any intradermal nevi (0/2), basal cell carcinomas (0/10) or Merkel cell carcinoma (0/1). We conclude TPase/PD-ECGF is found throughout the epidermis and its expression increases with differentiation of keratinocytes. In cutaneous tumors, expression of TPase/PD-ECGF may be linked to the cell of origin of the tumor as well as the tumor's degree of differentiation.