Integrin-linked kinase (ILK) links integrins to the actin cytoskeleton and is believed to phosphorylate several target proteins. We report that a keratinocyte-restricted deletion of the ILK gene leads to epidermal defects and hair loss. ILK-deficient epidermal keratinocytes exhibited a pronounced integrin-mediated adhesion defect leading to epidermal detachment and blister formation, disruption of the epidermal-dermal basement membrane, and the translocation of proliferating, integrin-expressing keratinocytes to suprabasal epidermal cell layers. The mutant hair follicles were capable of producing hair shaft and inner root sheath cells and contained stem cells and generated proliferating progenitor cells, which were impaired in their downward migration and hence accumulated in the outer root sheath and failed to replenish the hair matrix. In vitro studies with primary ILK-deficient keratinocytes attributed the migration defect to a reduced migration velocity and an impaired stabilization of the leading-edge lamellipodia, which compromised directional and persistent migration. We conclude that ILK plays important roles for epidermis and hair follicle morphogenesis by modulating integrin-mediated adhesion, actin reorganization, and plasma membrane dynamics in keratinocytes.