Regulation of epidermal proliferation and differentiation is critical for maintenance of cutaneous homeostasis. Interferon Regulatory Factor 6 (Irf6)-deficient mice die perinatally and exhibit ectopic proliferation and defective epidermal differentiation. We sought to determine whether these disruptions of epidermal function were cell autonomous, and used embryonic Irf6(-/-) keratinocytes to understand the specific role of Irf6 in keratinocyte proliferation and differentiation. In the absence of Irf6, keratinocytes exhibited a heterogeneous phenotype with the presence of large cells. Irf6(-/-) keratinocytes displayed increased colony-forming efficiency compared with wild-type cells, suggesting that Irf6 represses long-term proliferation. Irf6 was present at low levels in wild-type keratinocytes in culture, and upregulated after induction of differentiation in vitro, along with upregulation of markers of early differentiation. However, Irf6(-/-) keratinocytes did not express markers of terminal differentiation. Overexpression of Irf6 in wild-type keratinocytes was insufficient to induce expression of markers of differentiation under growing conditions. Together, these results indicated that Irf6 is necessary, but not sufficient, for keratinocyte differentiation. Finally, using a transgenic mouse expressing Lac-Z under the regulation of an enhancer element 9.7 kb upstream of the Irf6 start site, we demonstrated that this element contributes to the regulation of Irf6 in the epidermis and keratinocytes in culture.