PTEN is a tumor suppressor gene mutated in many human cancers. We used the Cre-loxP system to generate a keratinocyte-specific null mutation of Pten in mice (k5Pten^flox/flox mice). k5Pten^flox/flox mice exhibit wrinkled skin because of epidermal hyperplasia and hyperkeratosis and ruffled, shaggy, and curly hair. Histological examination revealed that skin morphogenesis is accelerated in k5Pten^flox/flox mice. Within 3 weeks of birth, 90% of k5Pten^flox/flox mice die of malnutrition possibly caused by hyperkeratosis of the esophagus. All k5Pten^flox/flox mice develop spontaneous tumors within 8.5 months of birth, and chemical treatment accelerates the onset of tumors. k5Pten^flox/flox keratinocytes are hyperproliferative and resistant to apoptosis and show increased activation of the Pten downstream signaling mediators Akt/protein kinase B (PKB) and extracellular signal-regulated kinase. Pten is thus an important regulator of normal development and oncogenesis in the skin.