Genetic experiments established that p63 is crucial for the development and maintenance of pluristratified epithelia. In the RNA interference (RNAi) screening for targets of p63 in keratinocytes, we identified the transcription factor, High Mobility Group (HMG) box protein 1 (HBP1). HBP1 is an HMG-containing repressor transiently induced during differentiation of several cell lineages. We investigated the relationship between the two factors using RNAi, overexpression, chromatin immunoprecipitations and transient transfections with reporter constructs, we established that HBP1 is directly repressed by p63. This was further confirmed in vivo by evaluating expression in p63 knockout mice and in transgenics expressing p63 in basal keratinocytes. Consistent with these findings, expression of HBP1 increases upon differentiation of primary keratinocytes and HaCaT cells in culture, and it is higher in the upper layers of human skin. Inactivation of HBP1 by RNAi prevents differentiation of keratinocytes and stratification of organotypic skin cultures. Finally, we analyzed the keratinocyte transcriptomes after HBP1 RNAi; in addition to repression of growth-promoting genes, unexpected activation of differentiation genes was uncovered, coexisting with repression of other genes involved in epithelial cornification. Our data indicate that suppression of HBP1 is part of the growth-promoting strategy of p63 in the lower layers of epidermis and that HBP1 temporally coordinates expression of genes involved in stratification, leading to the formation of the skin barrier.