p63 is critical for squamous development and exists as multiple isotypes of two subclasses, TA and DeltaN. DeltaNp63 isotypes can antagonize transcription by TAp63 and p53, and are highly expressed in squamous cell cancers. Using mouse keratinocytes as a biological model of squamous epithelium, we show that multiple p63 isotypes, DeltaN- and TA-containing, are expressed and differentially modulated during in vitro murine keratinocyte differentiation. DeltaNp63alpha declines with Ca2+-induced differentiation, while a smaller DeltaN-form, DeltaNp63s, persists, suggesting unique functions of the two DeltaN-forms. To investigate the impact of dysregulated p63 expression that is observed in cancers and to define the biological contribution of the different domains of the p63 isotypes, DeltaNp63alpha, DeltaNp63p40, TAp63alpha, TAp63gamma or beta-galactosidase were overexpressed in primary murine keratinocytes. Microarray, RT-PCR and western blot analyses revealed that overexpression of DeltaNp63p40, which lacks the entire alpha-tail present in DeltaNp63alpha, permits expression of a full panel of differentiation markers. This is in contrast to overexpression of the full-length DeltaNp63alpha, which blocks induction of keratin 10, loricrin and filaggrin. These findings support a role for the alpha-tail of DeltaNp63alpha in blocking differentiation-specific gene expression. Overexpression of either TAp63 isotype permits keratin 10 and loricrin expression, thus the alpha-terminus requires the cooperation of the DeltaN domain in blocking early differentiation. However, both TA isotypes block filaggrin induction. The DeltaN-terminus is sufficient to maintain keratinocytes in a proliferative state, as both DeltaN forms block Ca2+-mediated p21WAF1 induction and S-phase arrest, while sustaining elevated PCNA levels. No alteration in cell cycle regulation was observed in keratinocytes overexpressing TAp63alpha or TAp63gamma. Clarifying the functional distinctions between p63 isotypes and domains will help to elucidate how their dysregulation impacts tumor biology and may suggest novel therapeutic strategies for modulating behavior of tumor cells with altered expression of p53 family members.