Although the sebaceous gland (SG) plays an important role in skin function, the mechanisms regulating SG differentiation and carcinoma formation are poorly understood. We previously reported that c-MYC overexpression stimulates SG differentiation. We now demonstrate roles for the androgen receptor (AR) and p53. MYC-induced SG differentiation was reduced in mice lacking a functional AR. High levels of MYC triggered a p53-dependent DNA damage response, leading to accumulation of proliferative SG progenitors and inhibition of AR signaling. Conversely, testosterone treatment or p53 deletion activated AR signaling and restored MYC-induced differentiation. Poorly differentiated human sebaceous carcinomas exhibited high p53 and low AR expression. Thus, the consequences of overactivating MYC in the SG depend on whether AR or p53 is activated, as they form a regulatory axis controlling proliferation and differentiation.