An autosomal recessive ichthyosis characterized by collodian membrane at birth followed by generalized skin redness and fine, light-colored scales has been termed nonbullous congenital ichthyosiform erythroderma (CIE). CIE has often been classified together with the other major form of recessive ichthyosis without internal organ involvement, lamellar ichthyosis, which is characterized by minimal erythema and a coarser, darker scale pattern. Recently, autosomal recessive ichthyosis has been associated with keratinocyte transglutaminase (TGase1) defects in some patients. This group of diseases, however, is genetically heterogeneous and TGase1 abnormalities in CIE have not been clearly described. Therefore we examined TGase1 expression in five patients with CIE and three with classic lamellar ichthyosis. Although lamellar ichthyosis patients displayed no TGase1 expression, an abnormal intracellular accumulation of TGase1 was observed in four of five CIE patients. This finding was specific and was not observed in other skin disorders characterized by erythema and abnormal cornification, including erythrodermic psoriasis, atopic dermatitis, epidermolytic hyperkeratosis, and Netherton's syndrome. CIE keratinocytes with abnormal TGase1 localization expressed full-length TGase1 mRNA and protein but demonstrated transglutaminase activity intermediate between normal and the minimal activity seen in lamellar ichthyosis patient cells. The abnormal TGase1 expression pattern and CIE clinical features were recapitulated in epidermis regenerated in vivo on immune deficient mice from CIE patient keratinocytes. These studies describe a specific abnormality in TGase1 intrinsic to keratinocytes in a subset of CIE patients and suggest that this abnormality may be involved in the disordered epidermal differentiation seen in this disorder.