The corneal epithelium is renowned for high regenerative potential, which is dependent on the coordinated function of its diverse progenitor subpopulations. However, the molecular pathways governing corneal epithelial progenitor differentiation are incompletely understood. Here, we identify a highly proliferative limbal epithelial progenitor subpopulation characterized by expression of basal cell adhesion molecule (BCAM) that is capable of holocone formation and corneal epithelial sheet generation. BCAM-positive cells can be found among ABCB5-positive limbal stem cells (LSCs) as well as among ABCB5-negative limbal epithelial cell populations. Mechanistically, we show that BCAM is functionally required for cellular migration and differentiation and that its expression is regulated by the transcription factor p63. In aggregate, our study identifies limbal BCAM expression as a marker of highly proliferative corneal epithelial progenitor cells and defines the role of BCAM as a critical molecular mediator of corneal epithelial differentiation.