Chronic or excessive inflammation are hallmarks of many human diseases, but the endogenous factors that limit inflammatory responses are insufficiently characterized. We discovered a broad anti-inflammatory function of fibroblast growth factor 7 (FGF7), which is mediated via epithelial cels. FGF7 suppressed the expression of pro-inflammatory and immunomodulatory genes in cultured human keratinocytes in the absence or presence of pro-inflammatory stimuli and in a psoriasiform inflammation model in mice. Mechanistically, this involves an FGF7-FGF receptor 2 (FGFR2)-MAPK-Kruppel-like factor 4 (KLF4) signaling axis. FGF7 induced significant alterations in the KLF4 interactome in human keratinocytes and suppressed the transcriptional activity of KLF4 at its pro-inflammatory target genes. Concomitantly, expression of FGFR2 and downstream signaling components was promoted by KLF4, identifying a KLF4-dependent regulatory feedback loop that sustains anti-inflammatory FGF signaling. These results suggest activation of FGF7-FGFR2-KLF4 signaling as a strategy for the treatment of inflammatory diseases involving the skin or other epithelial tissues and highlight the role of epithelial cells in the control of inflammation.