Loricrin is a major component of the epidermal cornified cell envelope, and is expressed only in terminally differentiated keratinocytes. This cell differentiation-specific expression pattern suggests specific suppression of loricrin gene expression in undifferentiated keratinocytes as well as its activation in differentiated keratinocytes. We identified a negative regulatory sequence element in the first intron of the mouse loricrin gene involved in suppression of loricrin gene expression in undifferentiated keratinocytes. A database search indicated that this sequence contained the putative inverted Yin-Yang 1 (YY1)-binding motif. Constructs with point mutations in the putative YY1-binding motif showed increased reporter activity, indicating that YY1 negatively regulates loricrin gene transcription. Co-transfection experiments using a YY1 expression vector revealed that YY1 represses loricrin promoter activity. Western blotting and immunohistochemical analyses indicated that YY1 is more abundant in undifferentiated than in differentiated keratinocytes. These findings suggest that YY1 contributes to specific loricrin gene expression in differentiated keratinocytes by suppression of its transcription in undifferentiated keratinocytes. Furthermore, we demonstrated that forced expression of YY1 in differentiated keratinocytes results in specific downregulation of expression of other early and late differentiation markers.