p63, a homologue of the tumor suppressor p53, is critical for the development and maintenance of squamous epithelia. p63 is specifically expressed in the basal layers of stratified epithelial tissues and is considered a specific marker for cells of this type. The role of p63 in tumorigenesis remains poorly defined. Numerous studies have highlighted the oncogenic potential of the predominant p63 isoform DeltaNp63alpha; however, data suggest that other p63 proteins can act as tumor suppressors or alter the metastatic potential of tumors. DeltaNp63alpha can act as a transcriptional repressor, but the link between the transcriptional functions of p63 and its biological role is still unclear. In this study, we used a loss-of-function approach to investigate the transcriptional programs controlled by p63. Disruption of p63 in squamous cell lines resulted in down-regulation of transcripts specifically expressed in squamous tissues and a significant alteration of keratinocyte differentiation. Interestingly, we found that disruption of p63 led to up-regulation of markers of nonepithelial tissues (mesenchyme and neural tissue) in both primary and immortalized squamous cells. Many of these up-regulated genes are associated with increased capacity for invasion and metastasis in tumors. Furthermore, loss of p63 expression was accompanied by a shift toward mesenchymal morphology and an increase in motility in primary keratinocytes and squamous cell lines. We conclude that loss of endogenous p63 expression results in up-regulation of genes associated with invasion and metastasis, and predisposes to a loss of epithelial and acquisition of mesenchymal characteristics. These findings have implications for the role of p63 in both development and tumorigenesis.