Tumour suppressor p53 or proto-oncogene MYC is frequently altered in squamous carcinomas, but this is insufficient to drive carcinogenesis. We have shown that overactivation of MYC or loss of p53 via DNA damage triggers an anti-oncogenic differentiation-mitosis checkpoint in human epidermal keratinocytes, resulting in impaired cell division and squamous differentiation. Forkhead box M1 (FOXM1) is a transcription factor recently proposed to govern the expression of a set of mitotic genes. Deregulation of FOXM1 occurs in a wide variety of epithelial malignancies. We have ectopically expressed FOXM1 in keratinocytes of the skin after overexpression of MYC or inactivation of endogenous p53. Ectopic FOXM1 rescues the proliferative capacity of MYC- or p53-mutant cells in spite of higher genetic damage and a larger cell size typical of differentiation. As a consequence, differentiation induced by loss of p53 or MYC is converted into increased proliferation and keratinocytes displaying genomic instability are maintained within the proliferative compartment. The results demonstrate that keratinocyte oncogene-induced differentiation is caused by mitosis control and provide new insight into the mechanisms driving malignant progression in squamous cancer.