Heterozygous germline mutations in p63, a transcription factor of the p53 family, result in abnormal morphogenesis of the skin and its associated structures, including hair follicles and teeth. In mice lacking p63, all ectodermal organs fail to develop, and stratification of the epidermis is absent. We show that the ectodermal placodes that mark early tooth and hair follicle morphogenesis do not form in p63-deficient embryos, although the multilayered dental lamina that precedes tooth placode formation develops normally. The N-terminally truncated isoform of p63 (DeltaNp63) was expressed at high levels in embryonic ectoderm at all stages of tooth and hair development, and it was already dominant over the transactivating TAp63 isoform prior to epidermal stratification. Bmp7, Fgfr2b, Jag1 and Notch1 transcripts were co-expressed with DeltaNp63 in wild-type embryos, but were not detectable in the ectoderm of p63 mutants. In addition, beta-catenin and Edar transcripts were significantly reduced in skin ectoderm. We also demonstrate that BMP2, BMP7 and FGF10 are potent inducers of p63 in cultured tissue explants. Hence, we suggest that p63 regulates the morphogenesis of surface ectoderm and its derivatives via multiple signalling pathways.