Retinoids are widely used in the treatment of photoaging to stimulate dermal repair. However, retinoids also induce epidermal hyperplasia, which can lead to excessive scaling. Scaling is the major deterrent to topical retinoid therapy. Keratinocyte growth is strongly stimulated via ligand activation of EGFR. We examined regulation of EGFR ligands by retinoids and the role of EGFR in retinoid-induced hyperplasia in human skin in vivo. Topical treatment of human skin with all-trans retinoic acid (tRA) induces EGFR ligands heparin-binding (HB)-EGF and amphiregulin (AR), and reduces betacellulin mRNA levels. Laser capture microdissection-coupled real-time reverse transcription-PCR reveals that tRA increases HB-EGF mRNA throughout the epidermis, whereas AR induction is limited to basal keratinocytes. Topical tRA activates extracellular signal-regulated kinase 1/2 (Erk1/2) downstream EGFR effectors in human skin in vivo. tRA increases the soluble forms of AR and HB-EGF proteins, and induces epidermal hyperplasia, in human skin organ culture. Neutralization of HB-EGF or AR with specific antibodies strongly reduces tRA-induced epidermal hyperplasia. Finally, inhibition of EGFR activation by genistein reduces epidermal hyperplasia caused by topical retinoid treatment. These data demonstrate the central role of EGFR activation in retinoid-induced epidermal hyperplasia, and suggest that EGFR inhibitors can mitigate retinoid-induced scaling.