Psoriasis is a common, immune-mediated genetic disorder of the skin and is associated with arthritis in approximately 30% of cases. Previously, we localized PSORS2 (psoriasis susceptibility locus 2) to chromosomal region 17q25.3-qter after a genome-wide linkage scan in a family of European ancestry with multiple cases of psoriasis and psoriatic arthritis. Linkage to PSORS2 was also observed in a Taiwanese family with multiple psoriasis-affected members. In caspase recruitment domain family, member 14 (CARD14), we identified unique gain-of-function mutations that segregated with psoriasis by using genomic capture and DNA sequencing. The mutations c.349G>A (p.Gly117Ser) (in the family of European descent) and c.349+5G>A (in the Taiwanese family) altered splicing between CARD14 exons 3 and 4. A de novo CARD14 mutation, c.413A>C (p.Glu138Ala), was detected in a child with sporadic, early-onset, generalized pustular psoriasis. CARD14 activates nuclear factor kappa B (NF-kB), and compared with wild-type CARD14, the p.Gly117Ser and p.Glu138Ala substitutions were shown to lead to enhanced NF-kB activation and upregulation of a subset of psoriasis-associated genes in keratinocytes. These genes included chemokine (C-C motif) ligand 20 (CCL20) and interleukin 8 (IL8). CARD14 is localized mainly in the basal and suprabasal layers of healthy skin epidermis, whereas in lesional psoriatic skin, it is reduced in the basal layer and more diffusely upregulated in the suprabasal layers of the epidermis. We propose that, after a triggering event that can include epidermal injury, rare gain-of-function mutations in CARD14 initiate a process that includes inflammatory cell recruitment by keratinocytes. This perpetuates a vicious cycle of epidermal inflammation and regeneration, a cycle which is the hallmark of psoriasis.