Keratinocyte growth factor (KGF) regulates proliferation, differentiation, migration, and survival of different types of epithelial cells, including keratinocytes of the skin. To gain insight into the mechanisms underlying these multiple functions, we searched for KGF- regulated genes in keratinocytes. Using the differential display reverse transcriptase-PCR technology, we identified the gene encoding the estrogen-responsive B box protein (EBBP) which has as yet not been functionally characterized. The full-length murine and human EBBP cDNAs were cloned and fully sequenced. They were shown to encode 75-kDa proteins, which are mainly localized in the cytoplasm of keratinocytes in vitro and in vivo. In vivo, EBBP was found at high levels in the KGF- and epidermal growth factor-responsive basal keratinocytes of human skin, but the expression was down-regulated in the hyperthickened epithelium of skin wounds. Stable overexpression of EBBP in HaCaT keratinocytes did not affect the proliferation rate of the transfected cells, but enhanced the early differentiation process. These results suggest that the presence of EBBP in basal keratinocytes is important for the differentiation capacity of these cells, and that down-regulation of EBBP expression in a hyperproliferative epithelium is required to maintain the cells in a non-differentiated stage.