Loss-of-function mutations in Whn (Hfh 11), a winged-helix/forkhead transcription factor, result in the nude mouse phenotype. To determine the whn expression pattern during development, we utilized mice in which a beta-galactosidase reporter gene was placed under the control of the wild-type whn promoter by homologous recombination (M. Nehls et al., 1996, Science 272, 886-889). Sites of reporter expression were confirmed by immunohistochemical staining for Whn protein or by in situ hybridization for whn mRNA. At all developmental stages, whn expression is restricted to epithelial cells. In addition to the skin and thymus, whn is expressed in the developing nails, nasal passages, tongue, palate, and teeth. In embryonic epidermis, suprabasal cells induce whn expression at the same time that terminal differentiation markers first appear. As the epidermis matures, whn promoter activity is found primarily in the first suprabasal layer, which contains keratinocytes in the early stages of terminal differentiation. In developing and mature anagen hair follicles, whn is expressed at high levels in the postmitotic precursor cells of the hair shaft and inner root sheath. Though principally associated with terminal differentiation, whn expression is also detected in progenitor cell compartments; in the hair bulb matrix and basal epidermal layer, a small subclass of cells expresses whn, while in the outer root sheath, whn promoter activity is induced as the follicle completes its elongation. Within these compartments, rare cells exhibit both whn expression and the nuclear proliferation marker Ki-67. The results suggest that whn expression encompasses the transition from a proliferative to a postmitotic state and that whn regulates the initiation of terminal differentiation.