Nuclear inhibitor of protein phosphatase 1 (NIPP1) is a ubiquitously expressed nuclear protein that regulates functions of protein serine/threonine phosphatase-1 in cell proliferation and lineage specification. The role of NIPP1 in tissue homeostasis is not fully understood. This study shows that the selective deletion of NIPP1 in mouse epidermis resulted in epidermal hyperproliferation, a reduced adherence of basal keratinocytes, and a gradual decrease in the stemness of hair follicle stem cells, culminating in hair loss. This complex phenotype was associated with chronic sterile skin inflammation and could be partially rescued by dexamethasone treatment. NIPP1-deficient keratinocytes massively expressed proinflammatory chemokines and immunomodulatory proteins in a cell-autonomous manner. Chemokines subsequently induced the recruitment and activation of immune cells, in particular conventional dendritic cells and Langerhans cells, accounting for the chronic inflammation phenotype. The data identifies NIPP1 as a key regulator of epidermal homeostasis and as a potential target for the treatment of inflammatory skin diseases.