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Epidermal differentiation is characterized by a series of coordinated morphological and biochemical changes which result in a highly specialized, highly organized, stratified squamous epithelium. Among the specific markers expressed in differentiating epidermis are (a) two early spinous cell proteins, keratins 1 and 10 (K1 and K10); and (b) two later granular cell proteins, filaggrin and a cornified envelope precursor (CE). In vitro, epidermal basal cells are selectively cultured in 0.05 mM Ca2+ medium, and terminal differentiation is induced when the Ca2+ concentration is increased to 1 mM. However, only a small fraction of the cells express the markers K1, K10, CE, or filaggrin in the higher Ca2+ medium. To explore the factors required for marker expression, cultured epidermal cells were exposed to intermediate Ca2+ concentrations and extracts were analyzed using specific antibody and nucleic acid probes for the four markers of interest. These studies revealed that marker expression was enhanced at a restricted concentration of Ca2+ in the medium of 0.10-0.16 mM. At this Ca2+ concentration, both protein and mRNA levels for each marker were substantially increased, whereas at higher or lower Ca2+ concentrations they were diminished or undetected. The percentage of cells expressing each marker was increased two- to threefold in the permissive Ca2+ medium as determined by immunofluorescence analysis. This optimal level of Ca2+ was required both to initiate and sustain marker expression. At the permissive Ca2+ concentration, expression of the markers was sequential and similar to the order of appearance in vivo. K1 was expressed within 8-12 h and K10 was expressed in the ensuing 12-24-h period. CE and filaggrin were expressed in the subsequent 24 h. Inhibition of K1 expression by cycloheximide suggested that an inducible protein was involved. Other investigators have determined that a shallow Ca2+ gradient exists in epidermis, where the basal cells and spinous cells are in a Ca2+ environment substantially below serum Ca2+ levels. These in vitro results suggest that the Ca2+ environment is a fundamental regulator of expression of epidermal differentiation markers and provide an explanation for the existence of the Ca2+ gradient in vivo.