Acute eczema is an inflammatory skin disease characterized by the formation of small intraepidermal blisters, reduction of the adhesion molecule E-cadherin from the keratinocyte surface, and impaired keratinocyte cohesion. Here, we reveal that the disintegrin and metalloprotease ADAM10 is critically involved in regulating E-cadherin cell-surface expression in cultured primary human keratinocytes and in diseased human skin. Proinflammatory cytokines, transforming growth factor-β, and lipopolysaccharide led to increased release of soluble E-cadherin by activating mitogen-activated protein kinase signaling in cultured keratinocytes. Moreover, these stimuli decreased the amount of pro-ADAM10 and increased the level of the active protease, leading to loss of E-cadherin from the cell surface and decreased keratinocyte cohesion. In situ examination and immunoblot analyses of E-cadherin and ADAM10 expression in lesional skin of eczema revealed that the reduction of E-cadherin expression in areas of blister formation closely correlated with increased level of ADAM10 expression and elevated E-cadherin shedding. Our data suggest that ADAM10-mediated E-cadherin proteolysis leads to the impaired cohesion of keratinocytes observed in eczematous dermatitis and provide previously unreported insights into the understanding of the molecular mechanisms involved in inflammatory diseases with loss in epithelial integrity.