Development of skin appendages such as teeth, hairs and many exocrine glands, is regulated by inductive interactions between epithelial and mesenchymal tissues. At the molecular level, this interplay is mediated by conserved signaling proteins of the Wnt, FGF, TGFbeta, hedgehog and TNF families and executed by their downstream transcriptional regulators. p63, a transcription factor of the p53 family, is essential for the development of epidermis and its derivatives in vertebrates. The genomic organization of p63 is complex leading to transcription of at least six different isoforms with different, possibly even opposite functions. In humans, dominantly inherited mutations in p63 lead to a plenitude of syndromes that are featured by ectodermal dysplasia and/or craniofacial and limb malformations. In mice, lack of p63 causes a striking phenotype including severely truncated limbs, and absence of stratified epithelia and skin derivatives including teeth, hair follicles and mammary, lacrimal and salivary glands. While the significance of p63 for the morphogenesis of skin appendages is obvious, the molecular pathways regulated by p63 are only now emerging. This review discusses the current knowledge on the role of p63 in skin appendage development with emphasis on teeth and hair follicles.