This study examined immunohistochemical expression of ΔNp63, a keratinocyte stem cell marker, in oral leukoplakia (OL) and oral squamous cell carcinoma (OSCC) and then to elucidate usefulness of ΔNp63 as a marker for diagnosis and prognosis. One-hundred and twelve cases of OL and 81 cases of OSCC were analyzed by immunohistochemical staining for ΔNp63, Ki-67, and cytokeratin 14. These labeling indices (LIs) were calculated, and the association of these LIs with clinicopathologic characteristics in the OL and OSCC was evaluated. In the OL, these LIs increased significantly according to the severity of epithelial dysplasia (p<0.0001). ΔNp63-LI in the OL with malignant transformation was significantly higher than that in the OL without (49.3 vs. 34.2%; p<0.01). In the OSCC, the LIs increased significantly in association with the histologic grade (p<0.0001). A significant difference between the high and low ΔNp63-LI groups was found in the incidence of cervical lymph node and distant metastasis (p<0.05). The prognosis of the high ΔNp63-LI (mean value >73.8%) group is poorer than that of the low ΔNp63-LI (mean value ≤73.8%) group (p<0.05). These results suggested that increased ΔNp63 expression is involved in malignant transformation in epithelial dysplasia and poor prognosis in OSCC.