Keratoacanthoma (KA) is a common and generally benign keratinocyte skin tumor. Reports of the incidence rates of KA are scant. In addition, the risk factors for KA are not well understood, although associations with UV radiation exposure and older age have been described. To investigate the incidence rate of KA and the risk factors for developing KA. The study included data from 40 438 of 193 344 randomly selected residents of Queensland, Australia, who participated in the QSkin Sun and Health (QSkin) prospective population-based cohort study. All participants completed a baseline survey between 2010 and 2011 and were ages 40 to 69 years at baseline. Histopathologic reports of KA were prospectively collected until June 30, 2014, through data linkage with pathologic records. Cox proportional hazards models were used to identify risk factors associated with KA while controlling for potential confounding variables. Data were analyzed from January 2 to April 8, 2020. Demographic characteristics, phenotypes, UV radiation exposure, medical history, and lifestyle. Among 40 438 participants (mean [SD] age, 56 [8] years; 18 240 men [45.1%]), 596 individuals (mean [SD] age, 62 [6] years; 349 men [58.6%]) developed 776 KA tumors during a median follow-up period of 3.0 years (interquartile range, 2.8-3.3 years). The person-based age-standardized incidence rate for KA in the age-restricted cohort was 409 individuals per 100 000 person-years (based on the 2001 Australian population). Risk factors after adjustment for potential confounders were older age (age ≥60 years vs age <50 years; hazard ratio [HR], 6.38; 95% CI, 4.65-8.75), male sex (HR, 1.56; 95% CI, 1.33-1.84), fair skin (vs olive, dark, or black skin; HR, 3.42; 95% CI, 1.66-7.04), inability to tan (vs ability to tan deeply; HR, 1.69; 95% CI, 1.19-2.40), previous excisions of keratinocyte cancers (ever had an excision vs never had an excision; HR, 6.28; 95% CI, 5.03-7.83), current smoking (vs never smoking, HR, 2.02; 95% CI, 1.59-2.57), and high alcohol use (≥14 alcoholic drinks per week vs no alcoholic drinks per week; HR, 1.42; 95% CI, 1.09-1.86). This is, to date, the first large prospective population-based study to report the incidence rate and risk factors for KA. The high person-based incidence rate (409 individuals per 100 000 person-years) highlights the substantial burden of KA in Queensland, Australia. Furthermore, the study's findings suggest that older age (≥60 years), male sex, UV radiation-sensitive phenotypes, indications of high sun exposure (eg, previous keratinocyte cancer excisions), smoking, and high alcohol use are independent risk factors for the development of KA.