We have developed a multistage model system in which a normal mouse keratinocyte clone has been initiated with 7,12-dimethylbenz[a]anthracene and variant clones derived with benign or malignant phenotypes. To identify specific genes altered during mouse skin carcinogenesis, the gene expression patterns of the normal parental epidermal cell, an initiated cell, a benign papilloma, and a poorly differentiated squamous cell carcinoma were compared using RNA differential display. Most alterations in gene expression were observed at malignant conversion, that is, in the poorly differentiated squamous cell carcinoma that is known to have deregulated expression of p53. The sequence of a cloned cDNA fragment lost in the poorly differentiated squamous cell carcinoma was nearly identical to the 3' region of an adhesion-related kinase which is involved in homophilic cell aggregation. It is found in normal epidermal progenitor cells as well as tumorigenic cells with differentiation potential, but not in tumorigenic cells with a poorly differentiated phenotype, suggesting that this adhesion-related kinase may be involved in epidermal cell differentiation. Differential display within the cloned epidermal cell model appears to be useful in detecting and identifying malignant conversion-associated genes which then can be tested directly for their potential role in epithelial carcinogenesis.