In vivo studies, transgenic and knock-out mice have demonstrated that p63 isoforms play pivotal roles in ectodermal and epidermal development but their respective function remains highly controversial. Since embryonic stem (ES) cells can be differentiated into many cell types, they represent an effective tool to recapitulate in vitro the main steps of embryonic development. We recently reported the efficient derivation of ectodermal and epidermal cells from murine ES cells and clarified the function of BMP-4 in the binary neuroectodermal choice by stimulating sox-1(+) neural precursors to undergo specific apoptosis while inducing epidermal differentiation through DeltaNp63 gene activation. DeltaNp63 is not required for ectodermal fate but enhances ES-derived ectodermal cell proliferation and epidermal commitment. This unique cellular model should further provide a powerful tool for identifying the molecular mechanisms controlling normal skin development and in p63-ectodermal dysplasia human congenital pathologies.