Recent advances in reprogramming somatic cells into induced pluripotent stem cells (iPSCs) offer the possibility of developing new therapeutic approaches for the treatment of a variety of diseases, including inherited skin disorders. While the ultimate goal is the use of iPSCs in the treatment of human diseases, extensive research is still required with preclinical mouse models before iPSC technology can be introduced into the clinic. Therefore, the methodology for the derivation of multipotent keratinocytes from mouse iPSCs is of particular importance since it may allow for the assessment of the feasibility of using iPSCs in the treatment of inherited skin disorders using mouse models which mimic these diseases. Here, we describe two alternative protocols for the efficient differentiation of mouse iPSCs into functional keratinocytes capable of reconstituting a normal stratified epidermis, hair follicles, and sebaceous glands when grafted onto mice. Each protocol results in a different yield and efficiency of keratinocyte derivation depending on the mouse genetic background used in the study. Both protocols employ applications of retinoic acid and bone-morphogenetic protein-4 and growth on collagen type IV-coated dishes to induce iPSC differentiation toward a keratinocyte lineage.