In a transcriptome study of psoriatic (PP) vs. normal (NN) skin, we found a co-expressed gene module (N5) enriched 11.5-fold for lipid biosynthetic genes. We also observed fewer visible hairs in PP skin, compared to uninvolved (PN) or NN skin (p<0.0001). To ask whether these findings might be due to abnormalities of the pilosebaceous unit, we carried out 3D morphometric analysis of paired PP and PN biopsies. Sebaceous glands (SG) were markedly atrophic in PP vs. PN skin (91% average reduction in volume, p=0.031). Module N5 genes were strongly downregulated in PP vs. NN skin (fold-change [FC] < 0.25, 44.4-fold), and strongly up-regulated in sebaceous hyperplasia (SH, FC > 4, 54.1-fold). The intersection of PP-downregulated and SH-upregulated gene lists generated a gene expression signature consisting solely of module N5 genes, whose expression in PP vs. NN skin was inversely correlated with the signature of IL17-stimuated keratinocytes. Despite loss of visible hairs, morphometry identified elongated follicles in PP vs. PN skin (average 1.7 vs. 1.2 Jm, p=0.020). These results document SG atrophy in non-scalp psoriasis, identify a cytokine-regulated set of SG signature genes, and suggest that loss of visible hair in PP skin may result from abnormal SG function. Gene expression was compared between sebaceous hyperplasia lesions (n = 5) and normal skin (n = 3) from control subjects.