The skin is the largest organ of the body and consists of the underlying dermis and outer epidermis. Proper embryonic development and continual renewal of the adult epidermis are essential to provide an impenetrable barrier against fluid loss and serve as our most important defense against insults from the external environment. During mammalian embryogenesis the epidermis develops from the surface ectoderm, which initially consists of a multipotent single-layer epithelium. Once these epithelial cells receive the appropriate developmental cues, they become committed to stratify, initiate a massive expansion program, and finally embark on a journey of terminal differentiation to produce the morphologically distinct layers of the epidermis. The culmination of this journey is the formation of an impervious cornified envelope via a highly specialized form of programmed cell death, termed "cornification" (reviewed in Candi et al.), which is distinct in many ways from the classic apoptotic pathways. The epidermal developmental program that is first seen in the fetus is recapitulated for the entire life of the organism. The basal layer of adult skin harbors stem cells, which can divide to produce daughter stem cells and transit amplifying (TA) cells that go on to differentiate and cornify (reviewed in Fuchs and Raghavan). In this review we summarize current knowledge about the molecular regulation of proliferation and cornification in the developing mammalian epidermis. We focus on events in the interfollicular epidermis, with special emphasis on transcriptional regulation by p63, Notch, NF-kappaB/IKK, Hox, AP-1, AP-2, and C/EBP factors. We end with a discussion about perturbations in epidermal proliferation and cornification as they pertain to human skin pathologies.