A gene designated S has been identified in the class I region of the human major histocompatibility complex. The S gene is located 160 kb telomeric of HLA-C. It is expressed at high levels as 2.2-kb and 2.6-kb mRNAs in human skin. No homologous transcripts were detected in other tissues including placenta, liver, spleen, thymus, and brain. In situ hybridization showed that S gene expression was restricted to the differentiating keratinocytes in the granular layer of the epidermis. The predicted amino acid sequence of the S protein was remarkable for its high content of serine, glycine, and proline. There were significant similarities with the amino acid sequences of loricrin, keratin 1, and keratin 10, all major components of the granular- cell layer. The selective expression of the S gene in the granular-cell layer in the epidermis suggests a role in the developmental program of differentiating keratinocytes. Furthermore, in light of the recognized association of psoriasis vulgaris, a disorder of keratinocyte proliferation, with alleles of HLA-C, this gene may contribute primarily to the pathogenesis of this common disorder.