The homeodomain-only protein (HOP) contains an atypical homeodomain which is unable to bind to DNA due to mutations in residues important for DNA binding. Recently, HOP was reported to regulate proliferation/differentiation homeostasis in different cell types. In the present study, we performed transcriptional profiling of cultured primary human keratinocytes and noted a robust induction of HOP upon calcium-induced cell differentiation. Immunohistochemistry of human skin localized HOP to the granular layer in the epidermis. Overexpression of HOP using a lentiviral vector up-regulated FLG and LOR expression during keratinocyte differentiation. Conversely, decreasing HOP expression using small interfering RNA markedly reduced the calcium-induced expression of late markers of differentiation in vitro, with the most prominent effect on profilaggrin (FLG) mRNA. Moreover, mRNA levels of profilaggrin and loricrin were downregulated in the epidermis of HOP knockout mice. Analysis of skin disorders revealed altered HOP expression in lichen planus, psoriasis and squamous cell carcinoma (SCC). Our data indicate that HOP is a novel modulator of late terminal differentiation in keratinocytes.