BACKGROUND: The epidermis is maintained throughout adult life by pluripotential stem cells that give rise, via daughter cells of restricted self-renewal capacity and high differentiation probability (transit-amplifying cells), to interfollicular epidermis, hair follicles, and sebaceous glands. In vivo, transit-amplifying cells are actively cycling, whereas stem cells divide infrequently. Experiments with cultured human keratinocytes suggest that c-Myc promotes epidermal-stem cell differentiation. However, Myc is a potent oncogene that suppresses differentiation and causes reversible neoplasia when expressed in the differentiating epidermal layers of transgenic mice. To investigate the effects of c-Myc on the stem cell compartment in vivo, we targetted c-MycER to the basal layer of transgenic mouse epidermis. RESULTS: The activation of c-Myc by the application of 4-hydroxy-tamoxifen caused progressive and irreversible changes in adult epidermis. Proliferation was stimulated, but interfollicular keratinocytes still underwent normal terminal differentiation. Hair follicles were abnormal, and sebaceous differentiation was stimulated at the expense of hair differentiation. The activation of c-Myc by a single application of 4-hydroxy-tamoxifen was as effective as continuous treatment in stimulating proliferation and sebocyte differentiation, and the c-Myc-induced phenotype continued to develop even after the grafting of treated skin to an untreated recipient. CONCLUSIONS: We propose that transient activation of c-Myc drives keratinocytes from the stem to the transit-amplifying compartment and thereby stimulates proliferation and differentiation along the epidermal and sebaceous lineages. The ability, demonstrated here for the first time, to manipulate exit from the stem cell compartment in vivo will facilitate further investigations of the relationship between stem cells and cancer.