EphA2 is a receptor tyrosine kinase that is engaged and activated by membrane-linked ephrin-A ligands residing on adjacent cell surfaces. Ligand targeting of EphA2 has been implicated in epithelial growth regulation by inhibiting the extracellular signal-regulated kinase 1/2 (Erk1/2)-mitogen activated protein kinase (MAPK) pathway. Although contact-dependent EphA2 activation was required for dampening Erk1/2-MAPK signaling after a calcium switch in primary human epidermal keratinocytes, the loss of this receptor did not prevent exit from the cell cycle. Incubating keratinocytes with a soluble ephrin-A1-Fc peptide mimetic to target EphA2 further increased receptor activation leading to its down-regulation. Moreover, soluble ligand targeting of EphA2 restricted the lateral expansion of epidermal cell colonies without limiting proliferation in these primary cultures. Rather, ephrin-A1-Fc peptide treatment promoted epidermal cell colony compaction and stratification in a manner that was associated with increased keratinocyte differentiation. The ligand-dependent increase in keratinocyte adhesion and differentiation relied largely upon the up-regulation of desmoglein 1, a desmosomal cadherin that maintains the integrity and differentiated state of suprabasal keratinocytes in the epidermis. These data suggest that keratinocytes expressing EphA2 in the basal layer may respond to ephrin-A1–based cues from their neighbors to facilitate entry into a terminal differentiation pathway.