p63, a homolog of the tumor-suppressor p53, is essential for the development of the epidermis and limbs. p63 is highly expressed in the epithelial cell layer and acts as a molecular switch that initiates epithelial stratification. However, the mechanisms controlling p63 protein levels are still far from being fully understood. Here, we demonstrate a regulatory protein for p63 activity. We found that Pirh2 (p53-induced RING-H2) E3 ubiquitin ligase physically interacts with p63 and targets p63 for polyubiquitination and subsequently proteasomal degradation. We also found that ectopic expression of Pirh2 in HaCaT cells suppresses cell proliferation. Consistent with this, we found that along with altered expression of ΔNp63 protein, ectopic expression of Pirh2 promotes, whereas knockdown of Pirh2 inhibits, keratinocyte differentiation. Collectively, our data suggest that Pirh2 has a physiologically relevant role in keratinocyte differentiation through the posttranslational modification of p63 protein.