The EGFR ligand amphiregulin (AREG) has been implicated as an important autocrine growth factor in several epithelial malignancies and in psoriasis, a hyperproliferative skin disorder. To characterize the mechanisms by which AREG regulates autocrine epithelial cell growth, we transduced human keratinocytes (KCs) with lentiviral constructs expressing tetracycline (TET)-inducible small hairpin RNA (shRNA). TET-induced expression of AREG shRNA markedly reduced autocrine extracellular signal-regulated kinase phosphorylation, strongly inhibited autocrine KC growth with an efficiency similar to metalloproteinase and EGFR inhibitors, and induced several markers of KC differentiation, including keratins 1 and 10. Addition of various concentrations of exogenous EGFR ligands to KC cultures reversed the growth inhibition in response to AREG-blocking antibodies but not to shRNA-mediated AREG knockdown. Lentivirus-mediated expression of the full-length AREG transmembrane (TM) precursor, but not of the AREG extracellular domain, markedly reversed the shRNA-mediated growth inhibition and morphological changes, and strongly reduced the induction of multiple markers of KC differentiation. Taken together, our data show that autocrine human KC growth is highly dependent on the AREG TM precursor protein and strongly suggest a previously unreported function of the metalloproteinase-processed carboxy (C)-terminal domain of AREG.