Non-receptor tyrosine kinase proline-rich protein tyrosine kinase 2 (Pyk2) functions as an integrator of multiple signaling pathways involved in the regulation of fundamental cellular processes. Pyk2 expression, regulation, and functions in skin have not been examined. Here we investigated the expression and subcellular localization of Pyk2 in human epidermis and in primary human keratinocytes, and studied the mechanisms of Pyk2 activation by differentiation-inducing stimuli, and the role of Pyk2 as a regulator of keratinocyte differentiation. We demonstrate that Pyk2 is abundantly expressed in skin keratinocytes. Notably, the endogenous Pyk2 protein is predominantly localized in keratinocyte nuclei throughout all layers of healthy human epidermis, and in cultured human keratinocytes. Pyk2 is activated by treatment with keratinocyte-differentiating agents, 12-O-tetradecanoylphorbol-13-acetate and calcium via a mechanism that requires intracellular calcium release and functional protein kinase C (PKC) and Src activities. Particularly, differentiation-promoting PKC delta and PKC eta elicit Pyk2 activation. Our data show that Pyk2 increases promoter activity and endogenous protein levels of involucrin, a marker of keratinocyte terminal differentiation. This regulation is associated with increased expression of Fra-1 and JunD, activator protein-1 transcription factors known to be required for involucrin expression. Altogether, these results provide insights into Pyk2 signaling in epidermis and reveal a novel role for Pyk2 in regulation of keratinocyte differentiation.