Epidermal stem cells play a critical role in producing the multilayered vertebrate skin. Products of the p63 gene not only mark the epidermal stem cells, but also are absolutely required for the formation of mammalian epidermis. We find that early zebrafish embryos express a dominant-negative form of p63 (ΔNp63), which accumulates in the nucleus just as epidermal growth begins. Using antisense morpholino oligonucleotides, we show that ΔNp63 is needed for epidermal growth and limb development and is specifically required for the proliferation of epidermal cells by inhibiting p53 activity. While the structure of fish epidermis is very different from that of higher vertebrates, our study shows that ΔNp63 has essential and ancient role in the development of skin.