Although binding of peanut agglutinin (PNA) to keratinocytes is often used as a marker of terminal differentiation, the identity of the PNA-binding glycoproteins has been unclear. We now show that an antiserum raised against the glycoproteins recognises isoforms of CD44, the most abundant of which could be labelled with [35S]sulphate, indicating the presence of glycosaminoglycan side chains. RT-PCR analysis showed that keratinocytes expressed at least 5 forms of CD44 containing different numbers of exons from the variable region of the extracellular domain and also expressed the standard 'haemopoietic' form of CD44 which lacks the variable exons. Standard and variant isoforms of CD44 were expressed both by proliferating keratinocytes and cells undergoing terminal differentiation, although the level of CD44 mRNAs decreased when keratinocytes were placed in suspension to induce differentiation. The role of CD44 in intercellular adhesion was investigated by plating keratinocytes onto a rat pancreatic carcinoma line transfected with different CD44 isoforms. Keratinocyte adhesion to transfectants expressing variant exons 4-7 was greater than to cells expressing standard CD44 and could be inhibited with hyaluronan or digestion with hyaluronidase. These observations confirm earlier predictions that the PNA-binding glycoproteins of keratinocytes play a role in intercellular adhesion.