Crosstalk between keratinocytes and immune cells is crucial for the immunological barrier function of the skin, and aberrant crosstalk contributes to inflammatory skin diseases. Using mice with a keratinocyte-restricted deletion of the RAC1 gene we found that RAC1 in keratinocytes plays an important role in modulating the interferon (IFN) response in skin. These RAC1 mutant mice showed increased sensitivity in an irritant contact dermatitis model, abnormal keratinocyte differentiation, and increased expression of immune response genes including the IFN signal transducer STAT1. Loss of RAC1 in keratinocytes decreased actin polymerization in vivo and in vitro and caused Arp2/3-dependent expression of STAT1, increased interferon sensitivity and upregulation of aberrant keratinocyte differentiation markers. This can be inhibited by the AP-1 inhibitor tanshinone IIA. Loss of RAC1 makes keratinocytes hypersensitive to inflammatory stimuli both in vitro and in vivo, suggesting a major role for RAC1 in regulating the crosstalk between the epidermis and the immune system.