Psoriasis is a common inflammatory skin disease characterized by aberrant inflammation and epidermal hyperplasia. Molecular mechanisms that regulate psoriasis-like skin inflammation remain to be fully understood. Here, we show that the expression of Ovol1 (encoding ovo-like 1 transcription factor) is upregulated in psoriatic skin, and its deletion results in aggravated psoriasis-like skin symptoms following stimulation with imiquimod. Using bulk and single-cell RNA sequencing, we identify molecular changes in the epidermal, fibroblast, and immune cells of Ovol1-deficient skin that reflect an altered course of epidermal differentiation and enhanced inflammatory responses. Furthermore, we provide evidence for excessive full-length IL-1α signaling in the microenvironment of imiquimod-treated Ovol1-deficient skin that functionally contributes to immune cell infiltration and epidermal hyperplasia. Collectively, our study uncovers a protective role for OVOL1 in curtailing psoriasis-like inflammation and the associated skin pathology.