In Drosophila, differentiation of the epidermis results in a stereotyped array of cells with F-actin-based extensions at their apical face. We identified Ovo/Shavenbaby (Svb) as a transcription factor that governs changes in epidermal cell shape. Svb is required for the formation of apical extensions and cells deficient in svb differentiate a smooth surface. In both the embryo and the adult, we show that Svb is necessary and sufficient for the cells to grow extensions and that the tight regulation of ovo/svb activity is critical for morphogenesis to occur correctly. We establish that Svb triggers early F-actin redistribution and is able to initiate the entire process of cytoskeletal remodelling, thereby defining it as a major regulator of epidermal differentiation.