Intercellular adhesion molecule-1 (ICAM-1), which is induced by tumor necrosis factor (TNF)-α, contributes to the entry of immune cells into the site of inflammation in the skin. Here, we show that protein tyrosine phosphatase non-receptor type 21 (PTPN21) negatively regulates ICAM-1 expression in human keratinocytes. PTPN21 expression was transiently induced after stimulation with TNF-α. When overexpressed, PTPN21 inhibited the expression of ICAM-1 in HaCaT cells but PTPN21 C1108S, a phosphatase activity-inactive mutant, failed to inhibit ICAM-1 expression. Nuclear factor-κB (NF-κB), a key transcription factor of ICAM-1 gene expression, was inhibited by PTPN21, but not by PTPN21 C1108S. PTPN21 directly dephosphorylated phospho-inhibitor of κB (IκB)-kinase β (IKKβ) at Ser177/181. This dephosphorylation led to the stabilization of IκBα and inhibition of NF-κB activity. Taken together, our results suggest that PTPN21 could be a valuable molecular target for regulation of inflammation in the skin by dephosphorylating p-IKKβ and inhibiting NF-κB signaling.