Aldehyde dehydrogenase 1A1 (ALDH1A1) and ALDH3A1 are corneal crystallins. They protect inner ocular tissues from ultraviolet radiation (UVR)-induced oxidative damage through catalytic and non-catalytic mechanisms. Additionally, ALDH3A1 has been postulated to play a regulatory role in the corneal epithelium based on several studies that report an inverse association between ALDH3A1 expression and corneal cell proliferation. The underlying molecular mechanisms and the physiological significance of such association remain poorly understood. In the current study, we established Tet-On human corneal epithelial cell (hTCEpi) lines, which express tetracycline-inducible wild-type (wt) or catalytically-inactive (mu) ALDH3A1. Utilizing this cellular model system, we confirmed that human ALDH3A1 decreases corneal cell proliferation; importantly, this effect appears to be partially mediated by its enzymatic activity. Mechanistically, wt-ALDH3A1, but not mu-ALDH3A1, promotes sequestering of tumor suppressor p53 in the nucleus. In the mouse cornea, however, augmented cell proliferation is noted only in Aldh1a1(-/-)/3a1(-/-) double knockout (DKO) mice, indicating in vivo the anti-proliferation effect of ALDH3A1 can be rescued by the presence of ALDH1A1. Interestingly, the hyper-proliferative epithelium of the DKO corneas display nearly complete loss of p53 expression, implying that p53 may be involved in ALDH3A1/1A1-mediated effect. In hTCEpi cells grown in high calcium concentration, mRNA levels of a panel of corneal differentiation markers were altered by ALDH3A1 expression and modulated by its enzyme activity. In conclusion, we show for the first time that: (i) ALDH3A1 decreases corneal epithelial proliferation through both non-enzymatic and enzymatic properties; (ii) ALDH1A1 contributes to the regulation of corneal cellular proliferation in vivo; and (iii) ALDH3A1 modulates corneal epithelial differentiation. Collectively, our studies indicate a functional role of ALDH3A1 in the maintenance of corneal epithelial homeostasis by simultaneously modulating proliferation and differentiation through both enzymatic and non-enzymatic mechanisms.