The Myc oncoprotein is associated with cell proliferation and is often down-regulated during cell differentiation. The related Mad transcription factor, which antagonises Myc activity, is highly expressed in epidermal keratinocytes. Mad also inhibits cell proliferation in vitro. To study Mad expression in keratinocyte proliferation and differentiation, we have analysed Mad RNA expression in regenerating and hyperproliferative epidermal lesions and epidermal tumours of varying degrees of differentiation using the RNA in situ hybridisation and RNAase protection techniques. Mad was strongly expressed in differentiating suprabasal keratinocytes in healing dermal wounds and in benign hyperproliferative conditions, but also in squamous cell carcinomas, in which the keratinocytes retain their differentiation potential. However, Mad expression was lost in palisading basal carcinoma cells and poorly differentiated squamous cell carcinomas, which lacked the epithelial differentiation marker syndecan-1. We therefore suggest that Mad expression is closely associated with epithelial cell differentiation, and that this association is retained in epithelial tumours of the skin.