Cell-cell contacts are crucial for the integrity of all tissues. Contrasting reports have been published about the role of Cdc42 in epithelial cell-cell contacts in vitro. In keratinocytes, it was suggested that Rac1 and not Cdc42 is crucial for the formation of mature epithelial junctions, based on dominant negative inhibition experiments. Deletion of the Cdc42 gene in keratinocytes in vivo slowly impaired the maintenance of cell-cell contacts by an increased degradation of beta-catenin. Whether Cdc42 is required for the formation of mature junctions was not tested. We show now that Cdc42-deficient immortalized and primary keratinocytes form only punctate primordial cell contacts in vitro, which cannot mature into belt-like junctions. This defect was independent of enhanced degradation of beta-catenin, but correlated to an impaired activation and localization of aPKCzeta in the Cdc42-null keratinocytes. Inhibition of aPKCzeta by the inhibitor Gö6983 reproduced the phenotype, suggesting that decreased activation of aPKCzeta was sufficient to explain the defective junctional maturation. In the absence of Cdc42, Rac1 activation was strongly decreased, indicating that Cdc42 is upstream of Rac1 activation. These data reveal that Cdc42 is crucial for the formation of mature epithelial cell junctions between keratinocytes by regulating activation of aPKCzeta.