Previous studies have shown that expression of adenovirus type 2 (Ad2) is restricted in epidermal keratinocytes in what appears to be a differentiation specific manner. We have analyzed the relationship between keratinocyte differentiation and Ad2 early and late gene expression. Cultured epidermal keratinocytes infected with Ad2 were fractionated in density gradients of Ficoll 400 to enrich for populations of nondifferentiated cells and differentiated cells. Analysis of these populations revealed that both populations supported early Ad2 gene expression but restricted Ad2 late gene expression. The restriction to late gene expression differed in the two cell populations: Nondifferentiated keratinocytes did not support production of high levels of Ad2 capsid proteins, whereas differentiated keratinocytes supported synthesis of Ad2 capsid proteins but restricted Ad2 expression at a later step that normally leads to production of high titers of progeny virus. The changing restriction to Ad2 expression during keratinocyte differentiation may have resulted from changes in cellular components that play a role in cell differentiation.