Within the epidermis, proliferation takes place in the basal layer of keratinocytes that are attached to an underlying basement membrane. Cells that leave the basal layer undergo terminal differentiation as they move towards the tissue surface. The basal layer contains two types of proliferative keratinocyte: stem cells, which have unlimited self-renewal capacity, and transit amplifying cells, those daughters of stem cells that are destined to withdraw from the cell cycle and terminally differentiate after a few rounds of division. Stem cells express higher levels of the beta 1-integrin family of extracellular matrix receptors than transit amplifying cells and this can be used to isolate each subpopulation of keratinocyte and to determine its location within the epidermis. Variation in the levels of E-cadherin, beta-catenin and plakoglobin within the basal layer suggests that stem cells may also differ from transit amplifying cells in intercellular adhesiveness. Stem cells have a patterned distribution within the epidermal basal layer and patterning is subject to autoregulation. Constitutive expression of the transcription factor c-Myc promotes terminal differentiation by driving keratinocytes from the stem cell compartment into the transit amplifying compartment.