NF-κB signaling plays an important role in skin development and epidermal growth control. Moreover, inhibition of NF-κB signaling in murine epidermal keratinocytes in vivo, by expression of a keratin 5 (K5)-directed superrepressor form of inhibitor of NF-κB (IκBα), results in an inflammatory response characterized by a massive dermal infiltration of neutrophils, epidermal hyperplasia, and a rapid development of aneuploid squamous cell carcinomas (SCC). We now show that by crossing K5-IκBα mice onto a tumor necrosis factor receptor 1(Tnfr1)-null background, both the inflammatory and the tumorigenic responses are blocked. The specificity of the block is illustrated by the fact that K5-IκBα mice lacking the IL-1 receptor type 1 (Il1r1) develop inflammation and squamous cell carcinomas. Reconstitution of lethally irradiated K5-IκBα/Tnfr1^-/- mice with Tnfr1^+/- bone-marrow does not induce the inflammatory or the tumorigenic phenotype, indicating a critical dependence on Tnfr1-mediated signaling in skin cells or nonimmune cells. Our results suggest a critical role of local Tnfr1-mediated signaling and associated inflammatory response cooperating with repressed keratinocyte NF-κB signaling in driving skin cancer development.