Lrig1 marks a distinct population of stem cells restricted to the upper pilosebaceous unit in normal epidermis. Here we report that IL-17A–mediated activation of EGFR plays a critical role in the expansion and migration of Lrig1+ stem cells and their progenies in response to wounding, thereby promoting wound healing and skin tumorigenesis. Lrig1-specific deletion of the IL-17R adaptor Act1 or EGFR in mice impairs wound healing and reduces tumor formation. Mechanistically, IL-17R recruits EGFR for IL-17A–mediated signaling in Lrig1+ stem cells. While TRAF4, enriched in Lrig1+ stem cells, tethers IL-17RA and EGFR, Act1 recruits c-Src for IL-17A–induced EGFR transactivation and downstream activation of ERK5, which promotes the expansion and migration of Lrig1+ stem cells. This study demonstrates that IL-17A activates the IL-17R–EGFR axis in Lrig1+ stem cells linking wound healing to tumorigenesis.