RORα is a retinoid-related orphan nuclear receptor that regulates inflammation, lipid metabolism, and cellular differentiation of several non-epithelial tissues. In spite of its high expression in skin epithelium, its functions in this tissue remain unclear. Using gain- and loss-of-function approaches to alter RORα gene expression in human keratinocytes (HKCs), we have found that this transcription factor functions as a regulator of epidermal differentiation. Among the 4 RORα isoforms, RORα4 is prominently expressed by keratinocytes in a manner that increases with differentiation. In contrast, RORα levels are significantly lower in skin squamous cell carcinoma tumors (SCCs) and cell lines. Increasing the levels of RORα4 in HKCs enhanced the expression of structural proteins associated with early and late differentiation, as well as genes involved in lipid barrier formation. Gene silencing of RORα impaired the ability of keratinocytes to differentiate in an in vivo epidermal cyst model. The pro-differentiation function of RORα is mediated at least in part by FOXN1, a well-known pro-differentiation transcription factor that we establish as a novel direct target of RORα in keratinocytes. Our results point to RORα as a novel node in the keratinocyte differentiation network and further suggest that the identification of RORα ligands may prove useful for treating skin disorders that are associated with abnormal keratinocyte differentiation, including cancer.