Skin extracts contain an epidermal mitosis inhibitor that recently has been purified and identified as a pentapeptide. To develop an in vitro assay system for further biologic characterization, primary mouse epidermal cells and an established mouse epidermal cell line (line 308) were used for testing of the purified pentapeptide. In primary cell cultures the mitotic activity, as estimated by means of vinblastine, was reversibly inhibited by 44% at a peptide concentration of 10(-8) M in high-calcium (1.2 mM Ca++), and by 27-38% at peptide concentrations of 10(-10) and 10(-8) M in low-calcium (0.02 mM Ca++) medium. The 308 cells were inhibited by 46% at a peptide concentration of 10(-6) M but only after the cells had reached near-confluence and had a moderate rate of proliferation. A low concentration of adrenaline (0.18 micrograms/ml) in the medium rendered the primary cultures more sensitive to the peptide. After repeated peptide treatments over 24 h, the number of cornified envelopes (a marker of terminal differentiation) was increased both in primary cultures and in the 308 cells. The epidermal pentapeptide thus seems to influence both proliferation and terminal differentiation in cultured mouse epidermal cells.