Recent experiments reveal the role of transcription factors in integrating upstream signals to execute specification and differentiation of epidermal cells. Based on the skin phenotype observed with misregulation of transcription factors such as p63, c-Myc, RelA, pRb, Klf4 and others, their function in controlling proliferation and differentiation is dissected. Understanding the pathways regulated by these factors and their coordinate interactions remains a challenge for the future.