Skin keratinocytes form a tightly knit and layered epithelium at the surface of the body protecting the body from the outside environment. The formation and maintenance of skin epidermis is governed by dynamic and well-coordinated processes of cell proliferation, differentiation, and self-renewal. Such important cell fate decisions are made possible in part by transcription factors, which activate and repress unique sets of genes in a temporal and spatial pattern. The Tp63 gene encodes for multiple isoforms for one such transcription factor that serves as a key regulator of epidermal development and differentiation. The crucial function of p63 is epitomized by the phenotype of p63 knockout mice--in the absence of p63, there is a profound block in the development of skin epidermis and all related appendages such as hair follicles. Human syndromes resulting from Tp63 gene mutations phenocopy the p63 knockout phenotype, highlighting the evolutionarily conserved function of this factor in epithelial biology. Although the function of p63 as an important hub in transcriptional and signaling networks of keratinocytes is well established, the underlying molecular mechanisms of p63 action is continually redefined with the development of new genetic models and more extensive biochemical analysis. In this review the biological role of deltaNp63, the predominant isoform that is expressed in skin keratinocytes has been described. Results from transgenic animal models that have shed new information on the function of deltaNp63 in the epidermis and hair follicles have been discussed. Further, the molecular mechanisms that maintain the fine-tuned expression of deltaNp63 in skin keratinocytes are also described.