Squamous cells form the outermost layers of the epidermis, and though they are readily discarded from the tissue, they serve a vital water barrier function while in the stratum corneum. The generation of cornified or squamous keratinocytes involves a complex, multi-step differentiation process that insures the proper physical and immunological barrier functions of the epidermis are maintained. The regulation of keratinocyte terminal differentiation is influenced by a large number of signaling pathways. This article will review some recent findings regarding the roles of the protein kinase C (PKC) family in normal keratinocyte differentiation, as well as their involvement in skin diseases, especially skin cancer.