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BACKGROUND: The Notch pathway is essential for proper epidermal differentiation during embryonic skin development. Moreover, skin specific loss of Notch signaling in the embryo results in skin barrier defects accompanied by a B-lymphoproliferative disease. However, much less is known about the consequences of loss of Notch signaling after birth. METHODOLOGY AND PRINCIPAL FINDINGS: To study the function of Notch signaling in the skin of adult mice, we made use of a series of conditional gene targeted mice that allow inactivation of several components of the Notch signaling pathway specifically in the skin. We demonstrate that skin-specific inactivation of Notch1 and Notch2 simultaneously, or RBP-J, induces the development of a severe form of atopic dermatitis (AD), characterized by acanthosis, spongiosis and hyperkeratosis, as well as a massive dermal infiltration of eosinophils and mast cells. Likewise, patients suffering from AD, but not psoriasis or lichen planus, have a marked reduction of Notch receptor expression in the skin. Loss of Notch in keratinocytes induces the production of thymic stromal lymphopoietin (TSLP), a cytokine deeply implicated in the pathogenesis of AD. The AD-like associated inflammation is accompanied by a myeloproliferative disorder (MPD) characterized by an increase in immature myeloid populations in the bone marrow and spleen. Transplantation studies revealed that the MPD is cell non-autonomous and caused by dramatic microenvironmental alterations. Genetic studies demontrated that G-CSF mediates the MPD as well as changes in the bone marrow microenvironment leading to osteopenia. SIGNIFICANCE: Our data demonstrate a critical role for Notch in repressing TSLP production in keratinocytes, thereby maintaining integrity of the skin and the hematopoietic system.