ZAC is a zinc finger transcription factor that induces apoptosis and cell cycle arrest in various cell lines. The corresponding gene is maternally imprinted and localized on chromosome 6q24-q25, a region harboring an unidentified tumor suppressor gene for a variety of solid neoplasms. ZAC expression is lost or down-regulated in some breast, ovary, and pituitary tumors and in an in vitro model of ovary epithelial cell transformation. In the present study, we examined ZAC expression in normal skin and found a high expression level in basal keratinocytes and a lower, more heterogeneous, expression in the first suprabasal differentiating layers of epidermis. In vitro, ZAC was up-regulated following induction of keratinocyte differentiation. Conversely, ZAC expression triggered keratinocyte differentiation as indicated by induction of involucrin expression. Interestingly, we found a dramatic loss of ZAC expression in basal cell carcinoma, a neoplasm characterized by a relatively undifferentiated morphology. In contrast, ZAC expression was maintained in squamous cell carcinomas that retain the squamous differentiated phenotype. Altogether, these data suggest a role for ZAC at an early stage of keratinocyte differentiation and further support its role in carcinogenesis.