Somatic loss of wild-type alleles can produce disease traits such as neoplasia. Conversely, somatic loss of disease-causing mutations can revert phenotypes; however, these events are infrequently observed. Here we show that ichthyosis with confetti, a severe, sporadic skin disease in humans, is associated with thousands of revertant clones of normal skin that arise from loss of heterozygosity on chromosome 17q via mitotic recombination. This allowed us to map and identify disease-causing mutations in the gene encoding keratin 10 (KRT10); all result in frameshifts into the same alternative reading frame, producing an arginine-rich C-terminal peptide that redirects keratin 10 from the cytokeratin filament network to the nucleolus. The high frequency of somatic reversion in ichthyosis with confetti suggests that revertant stem cell clones are under strong positive selection and/or that the rate of mitotic recombination is elevated in individuals with this disorder.