Determining the roles of Rel/NF-I?B transcription factors in mouse skin development with loss-of-function mutants has been limited by redundancy among these proteins and by embryonic lethality associated with the absence of RelA. Using mice lacking RelA and c-rel, which survive throughout embryogenesis on a tumor necrosis factor alpha (TNF-I?)-deficient background (rela -/- c-rel-/- tnfI?-/-), we show that c-rel and RelA are required for normal epidermal development. Although mutant fetuses fail to form tylotrich hair and have a thinner epidermis, mutant keratinocyte progenitors undergo terminal differentiation to form an outer cornified layer. Mutant basal keratinocytes are abnormally small, exhibit a delay in G 1 progression, and fail to form keratinocyte colonies in culture. In contrast to the reduced proliferation of mutant keratinocytes during embryogenesis, skin grafting experiments revealed that the mutant epidermis develops a TNF-I?-dependent hyperproliferative condition. Collectively, our findings indicate that RelA and c-rel control the development of the epidermis and associated appendages during embryogenesis and regulate epidermal homeostasis in a postnatal environment through the suppression of innate immune-mediated inflammation.