The morphogenesis of skin epithelia and adult hair follicle cycling both require integrated signaling between the epithelium and underlying mesenchyme. Because of their unique regulation, keratin intermediate filaments represent useful markers for the analysis of determination and differentiation processes in complex epithelia, such as the skin. In this study, we analyzed the distribution of mouse type I keratin 16 during skin morphogenesis, in the adult hair cycle, and in challenged epidermis. In mature hair follicles, we find keratin 16 along with its type II keratin partner keratin 6 in the companion layer of the outer root sheath during anagen and in the club hair sheath during catagen and telogen. During embryonic development, the distribution of keratin 16 is uncoupled from its presumed polymerization partner, keratin 6. Keratin 16 initially localizes within early hair germs, but rapidly shifts to a subset of cells at the interface of basal and suprabasal cells above and around the hair germ. The presence of keratin 16 at the transition between mitotically active and differentiating cells is recapitulated in primary keratinocytes cultured in vitro and in phorbol 12-myristate 13-acetate-treated back skin in vivo. We propose that keratin 16 marks cells in an intermediate state of cellular properties in which keratinocytes retain the flexibility required for activities such as cell migration and even mitosis but are resilient enough to provide the structural integrity required of the early suprabasal layers in the context of development, adult hair cycling, and wound repair.