Epidermal development and differentiation are similar processes and therefore the study of one is likely to provide insight into the other. The signaling cascades required for epidermal differentiation are largely unknown. Recent evidence, however, has implicated two proteins, p63 and c-Myc, in different stages of epidermal development and differentiation. p63 was shown to be required for embryonic epidermal development. Mice lacking p63 do not develop stratified epithelia and appendages suggesting a role for p63 in the commitment to squamous epithelial lineages. Subsequent stem cell fate decisions are required to form the different structures of stratified epithelia including hair follicles, sebaceous glands, and epidermis. Several genes of the Wnt signaling pathway have been implicated in this process, including c-Myc, a downstream target of the Wnt pathway. Interestingly, targeted overexpression of c-Myc in the basal layer of the epidermis results in an increase in sebaceous gland size and number at the expense of hair follicles. This suggests that c-Myc promotes differentiation of epidermal stem cells into sebaceous glands. In this review, we discuss transgenic/knockout mouse models that have provided evidence linking c-Myc and p63 to different stages of epidermal development and differentiation.