The cellular mechanisms controlling cell fate in self-renewal tissues remain unclear. Cell cycle failure often leads to an apoptosis anti-oncogenic response. We have inactivated Cdk1 or Polo-like-1 kinases, essential targets of the mitotic checkpoints, in the epithelia of skin and oral mucosa. Here, we show that inactivation of the mitotic kinases leading to polyploidy in vivo, produces a fully differentiated epithelium. Cells within the basal layer aberrantly differentiate and contain large or various nuclei. Freshly isolated KO cells were also differentiated and polyploid. However, sustained metaphase arrest downstream of the spindle anaphase checkpoint (SAC) due to abrogation of CDC20 (essential cofactor of anaphase-promoting complex), impaired squamous differentiation and resulted in apoptosis. Therefore, upon prolonged arrest keratinocytes need to slip beyond G2 or mitosis in order to initiate differentiation. The results altogether demonstrate that mitotic checkpoints drive squamous cell fate towards differentiation or apoptosis in response to genetic damage.