Protein kinase C (PKC) plays a crucial role(s) in regulation of growth and differentiation of cells. In the present study, we examined possible roles of the α, δ, η, and ζ isoforms of PKC in squamous differentiation by overexpressing these genes in normal human keratinocytes. Because of the difficulty of introducing foreign genes into keratinocytes, we used an adenovirus vector system, Ax, which allows expression of these genes at a high level in almost all the cells infected for at least 72 h. Increased kinase activity was demonstrated in the cells overexpressing the α, δ, and η isoforms. Overexpression of the η isoform inhibited the growth of keratinocytes of humans and mice in a dose (multiplicity of infection [MOI])-dependent manner, leading to G₁ arrest. The η-overexpressing cells became enlarged and flattened, showing squamous cell phenotypes. Expression and activity of transglutaminase 1, a key enzyme of squamous cell differentiation, were induced in the η-overexpressing cells in dose (MOI)- and time-dependent manners. The inhibition of growth and the induction of transglutaminase 1 activity were found only in the cells that express the η isoform endogenously, i.e., in human and mouse keratinocytes but not in human and mouse fibroblasts or COS1 cells. A dominant-negative η isoform counteracted the induction of transglutaminase 1 by differentiation inducers such as a phorbol ester, 1α,25-dihydroxyvitamin D₃, and a high concentration of Ca²⁺. Among the isoforms examined, the δ isoform also inhibited the growth of keratinocytes and induced transglutaminase 1, but the α and ζ isoforms did not. These findings indicate that the η and δ isoforms of PKC are involved crucially in squamous cell differentiation.