Human interfollicular epidermis is renewed by stem cells that are clustered in the basal layer in a patterned, non-random distribution. Stem cells can be distinguished from other keratinocytes by high expression of beta1 integrins and lack of expression of terminal differentiation markers; they divide infrequently in vivo but form actively growing colonies in culture. In a search for additional stem cell markers, we observed heterogeneous epidermal expression of melanoma chondroitin sulphate proteoglycan (MCSP). MCSP was expressed by those keratinocytes with the highest beta1 integrin levels. In interfollicular epidermis, expression was confined to non-cycling cells and, in culture, to self-renewing clones. However, fluorescence-activated cell sorting on the basis of MCSP and beta1 integrin expression gave no more enrichment for clonogenic keratinocytes than sorting for beta1 integrins alone. To interfere with endogenous MCSP, we retrovirally infected keratinocytes with a chimera of the CD8 extracellular domain and the MCSP cytoplasmic domain. CD8/MCSP did not affect keratinocyte proliferation or differentiation but the cohesiveness of keratinocytes in isolated clones or reconstituted epidermal sheets was greatly reduced. CD8/MCSP caused stem cell progeny to scatter without differentiating. CD8/MCSP did not alter keratinocyte motility but disturbed cadherin-mediated cell-cell adhesion and the cortical actin cytoskeleton, effects that could be mimicked by inhibiting Rho. We conclude that MCSP is a novel marker for epidermal stem cells that contributes to their patterned distribution by promoting stem cell clustering.