A serum-free medium (LEP-1) has been developed for mouse epidermal keratinocytes. LEP-1 consists of "Ca2+-free" Eagle's MEM with non-essential amino acids and seven added supplements (transferrin, 5 micrograms/ml; epidermal growth factor (EGF), 5 ng/ml; hydrocortisone, 0.5 microM; insulin, 5 micrograms/ml; phosphoethanolamine and ethanolamine, each 50 microM; bovine pituitary extract, 180 micrograms of protein/ml). Although serum-free the culture system was dependent for growth on bovine pituitary extract as the only still undefined supplement. LEP-1 supports sustained multiplication of mouse keratinocytes for 25 or more population doublings. A clonal growth assay was developed to investigate the action of growth factors, hormones and other supplements on keratinocytes. Cells grown in LEP-1 (calcium concentration was 0.03 mM) maintained a high proliferative rate and presented the typical morphology of basal epidermal cells. When the calcium concentration of the medium was raised to 1.0 mM, the cells were triggered to differentiate terminally. The epithelial nature of the cells was demonstrated both by electron microscopy and by immunostaining with anti-keratin antibody. The maturation stage of the keratinocytes was defined by several morphological features during the proliferative phase and in terminally differentiating cultures. This serum-free system supported a useful number of cell divisions while keratinocytes retained the capacity to undergo terminal differentiation when given the appropriate stimulus. It provides, therefore, provides a useful model for investigations on growth, differentiation and malignant transformation of epidermal cells in culture.