Modification of the ionic calcium concentration in the culture medium markedly alters the pattern of proliferation and differentiation in cultured mouse epidermal cells. When medium calcium is lowered to 0.05-0.1 mM, keratinocytes proliferate rapidly with a high growth fraction and do not stratify, but continue to synthesize keratin. The cells grow as a monolayer for several months and can be subcultured and cloned in low Ca++ medium. Ultrastructural examination of cells cultured under low Ca++ conditions reveals widened intercellular spaces, abundant microvilli and perinuclear organization of tonofilaments and cellular organelles. Desmosomes are absent. Epidermal cells growing as a monolayer in low Ca++ can be induced to terminally differentiate by adding calcium to the level normally found in the culture medium (1.2 mM). Cell-to-cell contact occurs rapidly and desmosomes form within 2 hr. The cells stratify by l-2 days and terminally differentiate with cell sloughing by 3-4 days. After Ca++ addition, DNA synthesis decreases with a lag of 5-10 hr and is totally inhibited within 34 hr. In contrast, RNA and protein synthesis continue at 40-50% of the low Ca++ level at day 3, a time when many cells are detaching from the culture dish. Keratin synthesis is unaffected by the Ca++ switch.