Hepatocyte growth factor activator inhibitor type 1 (HAI-1)/serine protease inhibitor, Kunitz type 1 (SPINT1) is a membrane-bound, serine proteinase inhibitor initially identified as an inhibitor of hepatocyte growth factor activator. It also inhibits matriptase and prostasin, both of which are membrane-bound serine proteinases that have critical roles in epidermal differentiation and function. In this study, skin and hair phenotypes of mice lacking the Hai-1/Spint1 gene were characterized. Previously, we reported that the homozygous deletion of Hai-1/Spint1 in mice resulted in embryonic lethality attributable to impaired placental development. To test the role of Hai-1/Spint1 in mice, the placental function of Hai-1/Spint1-mutant mice was rescued. Injection of Hai-1/Spint1(+/+) blastocysts with Hai-1/Spint1(-/-) embryonic stem cells successfully generated high-chimeric Hai-1/Spint1(-/-) embryos (B6Hai-1(-/-High)) with normal placentas. These embryos were delivered without apparent developmental abnormalities, confirming that embryonic lethality of Hai-1/Spint1(-/-) mice was caused by placental dysfunction. However, newborn B6Hai-1(-/-High) mice showed growth retardation and died by 16 days. These mice developed scaly skin because of hyperkeratinization, reminiscent of ichthyosis, and abnormal hair shafts that showed loss of regular cuticular septation. The interfollicular epidermis showed acanthosis with enhanced Akt phosphorylation. Immunoblot analysis revealed altered proteolytic processing of profilaggrin in Hai-1/Spint1-deleted skin with impaired generation of filaggrin monomers. These findings indicate that Hai-1/Spint1 has critical roles in the regulated keratinization of the epidermis and hair development.