While keratinocytes go through the terminal differentiation and move toward the outer layers of epidermis, multiple proteins become sequentially incorporated into the cornified cell envelope. We have identified through yeast two-hybrid screening a novel protein, periphilin, interacting with periplakin, which is known as a precursor of the cornified cell envelope. Periphilin gene at chromosome 12q12 gives rise to multiple alternatively spliced transcripts. A monoclonal antibody detected the keratinocyte-specific periphilin isoform in undifferentiated keratinocytes in speckle-type nuclear granules and at the nuclear membrane, but in differentiated keratinocytes periphilin localized to the cell periphery and at cell-cell junctions, colocalizing there with periplakin. From cultured keratinocytes, periphilin was solubilized only after urea extraction, indicating the highly insoluble character of this protein. The nuclear localization, mediated through the N-terminal sequences of periphilin protein, is a prerequisite for the formation of insoluble complexes. Although the globular N terminus of periphilin was necessary for the interaction with the periplakin tail, the keratinocyte-specific C terminus was responsible for the homodimerization. The C-terminal helical domain, composed of multiple heptad repeats, serves as a substrate for cross-linking by transglutaminases but also was specifically cleaved by caspase-5 in vitro. In conclusion, the localization pattern and insolubility of periphilin indicate that this novel protein is potentially involved in epithelial differentiation and contributes to epidermal integrity and barrier formation.