Matriptase (membrane-type serine proteinase) was reported to play a role in nonmelanoma skin cancer progression. Moreover, it was shown to stimulate proteinase-activated receptor-2 (PAR(2)) in vitro. Hepatocyte growth factor activator inhibitor-1 (HAI-1), the matriptase inhibitor, is an important regulator of enzyme activity. Therefore, the aim of this study was to elucidate the putative role of matriptase, HAI-1, and PAR(2) in normal human skin, as well as in basal cell carcinomas (BCCs) and squamous cell carcinomas (SCCs). In normal human epidermis, PAR(2) colocalized with matriptase and HAI-1. Immunoreactivity of all proteins was found to be diminished in BCCs. Likewise, PAR(2) immunoreactivity was significantly decreased, whereas matriptase immunoreactivity was enhanced with SCC progression. We could also show that matriptase was complexed to HAI-1 in normal human skin, whereas in SCCs, the enzyme was present in an unassociated form. Both a specific peptide agonist for PAR(2) and the proteinase domain of matriptase were able to induce intracellular calcium mobilization and inhibition of proliferation in cultured HaCaT keratinocytes. In conclusion, our results suggest that PAR(2) is a substrate for matriptase in human skin in vivo. Deregulation of these proteins delineates SCC progression.