The shoot epidermis of land plants serves as a crucial interface between plants and the atmosphere: pavement cells protect plants from desiccation and other environmental stresses, while stomata facilitate gas exchange and transpiration. Advances have been made in our understanding of stomatal patterning and differentiation, and a set of 'master regulatory' transcription factors of stomatal development have been identified. However, they are limited to specifying stomatal differentiation within the epidermis. Here, we report the identification of an Arabidopsis homeodomain-leucine zipper IV (HD-ZIP IV) protein, HOMEODOMAIN GLABROUS2 (HDG2), as a key epidermal component promoting stomatal differentiation. HDG2 is highly enriched in meristemoids, which are transient-amplifying populations of stomatal-cell lineages. Ectopic expression of HDG2 confers differentiation of stomata in internal mesophyll tissues and occasional multiple epidermal layers. Conversely, a loss-of-function hdg2 mutation delays stomatal differentiation and, rarely but consistently, results in aberrant stomata. A closely related HD-ZIP IV gene, Arabidopsis thaliana MERISTEM LAYER1 (AtML1), shares overlapping function with HDG2: AtML1 overexpression also triggers ectopic stomatal differentiation in the mesophyll layer and atml1 mutation enhances the stomatal differentiation defects of hdg2. Consistently, HDG2 and AtML1 bind the same DNA elements, and activate transcription in yeast. Furthermore, HDG2 transactivates expression of genes that regulate stomatal development in planta. Our study highlights the similarities and uniqueness of these two HD-ZIP IV genes in the specification of protodermal identity and stomatal differentiation beyond predetermined tissue layers.