Loss-of-function mutations in Whn (Hfh11, Foxn1), a winged-helix/forkhead transcription factor, cause the nude phenotype, which is characterized by the abnormal morphogenesis of the epidermis, hair follicles, and thymus. To delineate the biochemical pathway of Whn, we investigated its upstream regulation and downstream effects using primary keratinocytes from wild-type and transgenic mice. The transgenic animals express whn from the involucrin promoter, which is active in keratinocytes undergoing terminal differentiation. In wild-type cultures, as in the epidermis, Whn was induced during the early stages of terminal differentiation and declined during later stages. In transgenic keratinocytes, whn overexpression altered the terminal differentiation program, stimulating an early differentiation marker (keratin 1) and suppressing later markers (profilaggrin, loricrin, and involucrin). These results suggest a role for Whn in the stepwise or temporal regulation of differentiation, as Whn can ensure that the differentiation program is carried out in proper sequence. Before the start of differentiation, Whn levels were suppressed by the p42/p44 mitogen-activated protein kinase cascade, and this signaling pathway was rapidly inactivated as differentiation began. Thus, as keratinocytes commit to terminal differentiation, mitogen-activated protein kinase signaling decreases, which permits the induction of Whn; Whn then activates early features of the differentiation program.