The epidermis is a stratified epithelium which develops depending on the transcription factor p63, a member of the p53 family of transcription factors. p63 is strongly expressed in the innermost basal layer where highly proliferative epithelial cells reside. p63 functions as a molecular switch that initiates epithelial stratification or cell fate determination while regulating proliferation and differentiation of developmentally mature keratinocytes. p63 acts upstream of Dlx3 homeobox gene in a transcriptional regulatory pathway relevant to ectodermal dysplasia. Here we show that Dlx3 triggers p63 protein degradation by a proteasome-dependent pathway. Mutant DeltaNp63alpha in which Threonine397 and Serine383 were replaced with Alanine as well as C-terminal truncated versions of DeltaNp63alpha are resistant to Dlx3-mediated degradation. Transient expression of Dlx3 is associated with Raf1 phosphorylation. Dlx3 is unable to promote p63 degradation in Raf1 depleted MEF cells or upon pharmacological knockdown of Raf1. Our data support a previously unrecognized role for Dlx3 in posttranslational regulation of DeltaNp63alpha protein level, a mechanism that may contribute to reduce the abundance of DeltaNp63alpha during differentiation of stratified epithelia.