Caspase-14 is an important protease in the proper formation of a fully functional skin barrier. Newborn mice that are deficient in caspase-14 exhibit increased transepidermal water loss and are highly sensitive to UVB-induced photodamage. Decreased caspase-14 expression and incomplete caspase-14 processing in lesional psoriatic parakeratotic stratum corneum has been reported previously. In this study, we show that caspase-14-deficient skin frequently displays incompletely cornified cells in the transitional zone between the granular and the cornified layers, pointing to a delay in cornification. We also demonstrate that after challenge of epidermal permeability barrier function by repetitive acetone treatment, a higher incidence of large parakeratotic plaques was observed in caspase-14-deficient skin. Furthermore, caspase-14-deficient mice are more prone than control mice to the development of parakeratosis upon induction of psoriasis-like dermatitis by imiquimod treatment. These results show that lack of caspase-14 expression predisposes to the development of parakeratosis and that caspase-14 has an important role in keratinocyte terminal differentiation and the maintenance of normal stratum corneum, especially in conditions causing epidermal hyperproliferation.