The multilayered epidermis is established through a stratification program, which is accompanied by a shift from symmetric toward asymmetric divisions (ACD), a process under tight control of the transcription factor p63. However, the physiological signals regulating p63 activity in epidermal morphogenesis remain ill defined. Here, we reveal a role for insulin/IGF-1 signaling (IIS) in the regulation of p63 activity. Loss of epidermal IIS leads to a biased loss of ACD, resulting in impaired stratification. Upon loss of IIS, FoxO transcription factors are retained in the nucleus, where they bind and inhibit p63-regulated transcription. This is reversed by small interfering RNA-mediated knockdown of FoxOs. Accordingly, transgenic expression of a constitutive nuclear FoxO variant in the epidermis abrogates ACD and inhibits p63-regulated transcription and stratification. Collectively, the present study reveals a critical role for IIS-dependent control of p63 activity in coordination of ACD and stratification during epithelial morphogenesis.