Recent studies strongly suggested that transcription factor 7-like 1 (Tcf7l1, also known as Tcf3) is involved in the differentiation of several types of cells, and demonstrated that Tcf7l1 modulates keratinocytes physiologically through regulating lipocalin 2 (LCN2), a key regulator of cell differentiation. To reveal the potential role of Tcf7l1 in the dysregulation of keratinocyte differentiation, both Tcf7l1 and LCN2 were determined in a variety of skin disorders. The in vitro effect of Tcf7l1 on keratinocyte differentiation was studied by culturing SCC-13 cells, and the human foreskin keratinocytes (HFKs) that were transfected with vectors for overexpressing human papillomavirus E6/E7 or Tcf7l1 genes. We found that both Tcf7l1 and LCN2 were highly expressed in those diseases characterized by defective keratinocyte differentiation (especially psoriasis vulgaris, condyloma acuminatum, squamous cell carcinoma, etc). Moreover, compared with control HFKs, SCC-13 cells and E6/E7-harboring HFKs expressed more Tcf7l1 and LCN2. Tcf7l1 siRNA transfection decreased LCN2 but increased involucrin and loricrin in HFKs under calcium stimuli. Conversely, Tcf7l1 overexpression in SCC-13 cells or vector-transfected HFKs induced lower involucrin and loricrin expression and less keratinocyte apoptosis, both of which, however, were partially abrogated by LCN2 siRNA or neutralizing anti-LCN2 antibody. Interestingly, the Tcf7l1 expression in HFKs correlated positively with the MMP-2 level, and the inhibition of MMP-2 decreased the LCN2 level and even attenuated the effect of Tcf7l1 on LCN2 expression. Therefore, Tcf7l1 dysregulates keratinocyte differentiation, possibly through upregulating the LCN2 pathway in an MMP-2 mediated manner. Elucidating the interaction between Tcf7l1 and LCN2 may help understand disordered cell differentiation in some skin diseases.