Zfp191 represses differentiation and keeps various cells in the stem/progenitor stage. Here, we report that a Zfp191 homolog protein, ZNF396, is expressed in basal cell carcinoma (BCC) and possibly represses the expression of a Notch system effector molecule, Hes1 (hairy and enhancer of split-1), and prevents BCC cells from undergoing Notch-mediated squamous cell differentiation. ZNF396 immunoreactivity was found in the nucleus of 35 of 38 cutaneous BCC and 4 of 74 squamous cell carcinoma tissue specimens. In non-tumorous epidermal tissues, ZNF396 immunoreactivity was restricted in basal cells. siRNA-mediated silencing of ZNF396 induced the expression of Notch2, Hes1, and involucrin in cultured BCC cells. Finally, we found that siRNA-mediated silencing of ZNF396 gene inhibited the proliferation of TE354.T basal cell carcinoma cells. ZNF396 might repress Notch-Hes1 signaling axis and prevent tumor cells from undergoing squamous differentiation in BCC.