Alternative splicing (AS) of messenger RNAs occurs in ∼95% of multi-exon human genes and generates diverse RNA and protein isoforms. We investigated AS events associated with human epidermal differentiation, a process crucial for skin function. We identified 6,413 AS events, primarily involving cassette exons. We also predicted 34 RNA-binding proteins (RBPs) regulating epidermal AS, including 19 previously undescribed candidate regulators. From these results, we identified FUS as an RBP that regulates the balance between keratinocyte proliferation and differentiation. Additionally, we characterized the function of a cassette exon AS event in MAP3K7, which encodes a kinase involved in cell signaling. We found that a switch from the short to long isoform of MAP3K7, triggered during differentiation, enforces the demarcation between proliferating basal progenitors and overlying differentiated strata. Our findings indicate that AS occurs extensively in the human epidermis and has critical roles in skin homeostasis.