The epidermis, the outer layer of the skin composed of keratinocytes, is a stratified epithelium that functions as a barrier to protect the organism from dehydration and external insults. The epidermis develops depending on the transcription factor p63, a member of the p53 family of transcription factors. p63 is strongly expressed in the innermost basal layer where epithelial cells with high clonogenic and proliferative capacity reside. Deletion of p63 in mice results in a dramatic loss of all keratinocytes and loss of stratified epithelia, probably due to a premature proliferative rundown of the stem and transient amplifying cells. Here we report that microRNA (miR)-203 is induced in vitro in primary keratinocytes in parallel with differentiation. We found that miR-203 specifically targets human and mouse p63 3'-UTRs and not SOCS-3, despite bioinformatics alignment between miR-203 and SOCS-3 3'-UTR. We also show that miR-203 overexpression in proliferating keratinocytes is not sufficient to induce full epidermal differentiation in vitro. In addition, we demonstrate that miR-203 is downregulated during the epithelial commitment of embryonic stem cells, and that overexpression of miR-203 in rapidly proliferating human primary keratinocytes significantly reduces their clonogenic capacity. The results suggest that miR-203, by regulating the DeltaNp63 expression level, is a key molecule controlling the p63-dependent proliferative potential of epithelial precursor cells both during keratinocyte differentiation and in epithelial development. In addition, we have shown that miR-203 can regulate DeltaNp63 levels upon genotoxic damage in head and neck squamous cell carcinoma cells, thus controlling cell survival.