Stratified squamous differentiation is a complex process involving the precise temporal regulation of keratinocyte differentiation-specific genes as well as keratinocyte growth, survival and programmed cell death. This highly coordinated process ultimately results in a nonviable squame which provides the barrier function of skin that is essential for life. At the molecular level the process of stratified squamous differentiation is characterized by a highly coordinated program of sequential changes in gene expression. The basic leucine zipper (bZIP) transcription factors, C/EBPa and C/EBPB, are abundantly expressed within specific keratinocytes of epidermis. We hypothesize that C/EBPa and C/EBPB have specific functions within the epidermis and regulate the expression of distinct genes involved in keratinocyte growth, differentiation and cell survival. We further hypothesize that C/EBPa and C/EBPB are critical in maintaining epidermal homeostasis and disruption of their function contributes to the neoplastic process. We propose C/EBPa and C/EBPB can function as tumor modifier genes that alter susceptibility to carcinogenesis. Specifically, we suggest that the loss of C/EBPa function releases keratinocytes from the negative growth restraint imposed by C/EBPa (i.e. tumor suppressor) while C/EBPB is a critical mediator of oncogenic Ras-induced tumorigenesis. Since 30 percent of all human tumors contain activated Ras oncogenes, elucidating the role of C/EBPB in regulating growth or survival of Rastransformed cells is critical for understanding the tumorigenic pathways that underlie a large proportion of human cancers. C/EBPB may thus provide an attractive target for developing anti-tumor drugs. Further characterization of C/EBPa will provide new insight into cell cycle regulation in squamous epithelium and how the loss of function may contribute to the neoplastic process.