Kazrin is an evolutionarily conserved protein that is upregulated during keratinocyte terminal differentiation. Kazrin localizes to desmosomes and binds the epidermal cornified envelope protein periplakin. Kazrin overexpression in human epidermal keratinocytes caused profound changes in cell shape, reduced filamentous actin, reorganized keratin filaments, and impaired assembly of intercellular junctions. These effects were attributable to decreased Rho activity in kazrin-overexpressing cells. Kazrin overexpression also stimulated terminal differentiation and reduced clonal growth in culture. Knockdown of kazrin decreased expression of differentiation markers and stimulated proliferation without changing total Rho activity. We conclude that kazrin is a dual regulator of intercellular adhesion and differentiation in keratinocytes and regulates these processes by Rho-dependent and -independent mechanisms.