Impaired wound healing of skin is one of the most serious complications of diabetes. However, the pathogenesis of this process is not known, and it is unclear whether impaired insulin signaling could directly affect skin physiology. To elucidate the role of insulin in skin, we studied skin insulin receptor (IR) null mice. The morphology of the skin of newborn IR null mice was normal; however, these mice exhibited decreased proliferation of skin keratinocytes and changes in expression of skin differentiation markers. Due to the short life span of the IR null mice, further characterization was performed in cultured skin keratinocytes that can be induced to differentiate in vitro, closely following the maturation pattern of epidermis in vivo. It was found that despite a compensatory increase in the insulin-like growth factor I receptor autophosphorylation, differentiation of cultured IR null keratinocytes was markedly impaired. In vitro proliferation was not affected as much. Furthermore, although the basal glucose transport system of the null mice was not defective, the insulin-induced increase in glucose transport was abrogated. These results suggest that insulin regulates, via the IR, the differentiation and glucose transport of skin keratinocytes, whereas proliferation is affected by the diabetes milieu of IR knockout mice.