Psoriasis is a chronic autoinflammatory skin disease. Although IL-17, derived from lymphocytes, has been shown critical in psoriasis, the initiation and maintenance of chronic skin inflammation has not been understood. IL-25/IL-17E, another IL-17 family cytokine, is well known to regulate allergic responses and type 2 immunity. Here we show that IL-25, also highly expressed in lesional skin of psoriasis patients, was regulated by IL-17 in murine skin of imiquimod (IMQ)-induced psoriasis model. IL-25 injection induced skin inflammation, while germline or keratinocyte-specific deletion of IL-25 caused resistance to IMQ-induced psoriasis. With its receptor IL-17RB expressed in keratinocytes, IL-25 stimulated the proliferation of keratinocytes and induced the production of inflammatory cytokines and chemokines, via activation of STAT3. Interestingly, upon IL-25 engagement, IL-17RB was tyrosine phosphorylated, which recruited and activated STAT3. Thus, our data demonstrate an antoregulatory circuit in keratinocytes mediated by IL-25, which may be targeted in treatment of psoriasis patients.