Psoriasis is a chronic autoinflammatory skin disease. Although interleukin-17, derived from lymphocytes, has been shown to be critical in psoriasis, the initiation and maintenance of chronic skin inflammation has not been well understood. IL-25 (also called IL-17E), another IL-17 family cytokine, is well known to regulate allergic responses and type 2 immunity. Here we have shown that IL-25, also highly expressed in the lesional skin of psoriasis patients, was regulated by IL-17 in murine skin of a imiquimod (IMQ)-induced psoriasis model. IL-25 injection induced skin inflammation, whereas germline or keratinocyte-specific deletion of IL-25 caused resistance to IMQ-induced psoriasis. Via IL-17RB expression in keratinocytes, IL-25 stimulated the proliferation of keratinocytes and induced the production of inflammatory cytokines and chemokines, via activation of the STAT3 transcription factor. Thus, our data demonstrate that an IL-17-induced autoregulatory circuit in keratinocytes is mediated by IL-25 and suggest that this circuit could be targeted in the treatment of psoriasis patients.