The survival and growth of epithelial cells depend on adhesion to the extracellular matrix. Because epidermal keratinocytes differentiate as they leave the basement membrane, an adhesion signal may regulate the initiation of differentiation. Phosphatidylinositol 3-kinase (PI3K) is a fundamental signaling molecule that regulates the adhesion signal. Transfection of a dominant negative form of PI3K into keratinocytes using an adenovirus vector resulted in significant morphological changes comparable to differentiation and the induction of differentiation markers, keratin (K) 1 and K10. In turn, transfection with the constitutively active form of PI3K almost completely abolished the induction of K1 and K10 by differentiation in suspension cultures using polyhydroxyethylmethacrylate-coated dishes. PI3K activity was lost in suspension culture, except by cells bearing the constitutively active form of PI3K. These data demonstrate that blockade of PI3K results in differentiation and that activation of PI3K prevents differentiation. Furthermore, expression of the dominant negative form of PI3K significantly inhibited keratinocyte adhesion to the extracellular matrix and reduced the surface expression of alpha(6) and beta(1) integrins in suspension culture. Moreover, expression of the active form of PI3K restored the mRNA levels of adhesion molecules that were reduced in suspension culture, including alpha(3), alpha(6), and beta(1) integrins, BP180, and BP230. In conclusion, loss of PI3K activity results in keratinocytes leaving the basement membrane and the initiation of a "default" differentiation mechanism.