Defective permeability barrier is an important feature of many skin diseases and causes mortality in premature infants. To investigate the control of barrier formation, we characterized the epidermally expressed Grainyhead-like epithelial transactivator (Get-1)/Grhl3, a conserved mammalian homologue of Grainyhead, which plays important roles in cuticle development in Drosophila. Get-1 interacts with the LIM-only protein LMO4, which is co-expressed in the developing mammalian epidermis. The epidermis of Get-1^−/− mice showed a severe barrier function defect associated with impaired differentiation of the epidermis, including defects of the stratum corneum, extracellular lipid composition and cell adhesion in the granular layer. The Get-1 mutation affects multiple genes linked to terminal differentiation and barrier function, including most genes of the epidermal differentiation complex. Get-1 therefore directly or indirectly regulates a broad array of epidermal differentiation genes encoding structural proteins, lipid metabolizing enzymes and cell adhesion molecules. Although deletion of the LMO4 gene had no overt consequences for epidermal development, the epidermal terminal differentiation defect in mice deleted for both Get-1 and LMO4 is much more severe than in Get-1^−/− mice with striking impairment of stratum corneum formation. These findings indicate that the Get-1 and LMO4 genes interact functionally to regulate epidermal terminal differentiation.