Despite the pivotal role of beta-catenin in a variety of biological processes, conditional beta-catenin gene ablation in the skin of transgenic mice failed to affect interfollicular epidermal morphogenesis. We elucidated the molecular mechanisms underlying this phenomenon. Long-term cultures of homozygous, heterozygous and beta-catenin-null mutant keratinocytes were established to demonstrate that epidermal keratinocyte proliferation, cell cycle progression and cyclin D1 expression occur independently of beta-catenin and correlate with repression of transcription from Tcf/Lef-responsive promoters. Moreover, during differentiation, beta-catenin-null cells assemble normal intercellular adhesion junctions owing to the substitution of beta-catenin with plakoglobin, whereas the expression of the other adhesion components remains unaffected. Taken together, our results demonstrate that epidermal proliferation and adhesion are independent of beta-catenin.