Psoriasis is a chronic and complex inflammatory skin disease with lesions displaying dramatically altered mRNA expression profiles. However, much less is known about the expression of small RNAs. Here, we describe a comprehensive analysis of the normal and psoriatic skin miRNAome with next-generation sequencing in a large patient cohort. We generated 6.7 × 10(8) small RNA reads representing 717 known and 284 putative novel microRNAs (miRNAs). We also observed widespread expression of isomiRs and miRNA*s derived from known and novel miRNA loci, and a low frequency of miRNA editing in normal and psoriatic skin. The expression and processing of selected novel miRNAs were confirmed with qRT-PCR in skin and other human tissues or cell lines. Eighty known and 18 novel miRNAs were 2-42-fold differentially expressed in psoriatic skin. Of particular significance was the 2.7-fold upregulation of a validated novel miRNA derived from the antisense strand of the miR-203 locus, which plays a role in epithelial differentiation. Other differentially expressed miRNAs included hematopoietic-specific miRNAs such as miR-142-3p and miR-223/223*, and angiogenic miRNAs such as miR-21, miR-378, miR-100 and miR-31, which was the most highly upregulated miRNA in psoriatic skin. The functions of these miRNAs are consistent with the inflammatory and hyperproliferative phenotype of psoriatic lesions. In situ hybridization of differentially expressed miRNAs revealed stratified epidermal expression of an uncharacterized keratinocyte-derived miRNA, miR-135b, as well as the epidermal infiltration of the hematopoietic-specific miRNA, miR-142-3p, in psoriatic lesions. This study lays a critical framework for functional characterization of miRNAs in healthy and diseased skin.