Psoriasis is a chronic, inflammatory skin disease involving both environmental and genetic factors. According to genome-wide association studies (GWAS), the TNIP1 gene, which encodes the TNF-α-induced protein 3-interacting protein 1 (TNIP1), is strongly linked to the susceptibility of psoriasis. TNIP1 is a widely expressed ubiquitin sensor that binds to the ubiquitin-editing protein A20 and restricts TNF- and TLR-induced signals. In our study, TNIP1 expression decreased in specimens of epidermis affected by psoriasis. Based on previous studies suggesting a role for TNIP1 in modulating cancer cell growth, we investigated its role in keratinocyte proliferation, which is clearly abnormal in psoriasis. To mimic the downregulation or upregulation of TNIP1 in HaCaT cells and primary human keratinocytes (PHKs), we used a TNIP1 specific small interfering hairpin RNA (TNIP1 shRNA) lentiviral vector or a recombinant TNIP1 (rTNIP1) lentiviral vector, respectively. Blocking TNIP1 expression increased keratinocyte proliferation, while overexpression of TNIP1 decreased keratinocyte proliferation. Furthermore, we showed that TNIP1 signaling might involve extracellular signal-regulated kinase1/2 (Erk1/2) and CCAAT/enhancer-binding protein β (C/EBPβ) activity. Intradermal injection of TNIP1 shRNA in BALB/c mice led to exaggerated psoriatic conditions in imiquimod (IMQ)-induced psoriasis-like dermatitis. These findings indicate that TNIP1 has a protective role in psoriasis and therefore could be a promising therapeutic target.