The expression of p63 (TP63/p51) occurs in the basal cells of stratified epithelia and is strongly enhanced at the early stages of squamous cell carcinomas (SCCs) of the head and neck, skin, cervix, and others. We analyzed a promoter/enhancer region (2kΔN) that drives the predominant expression of ΔNp63 for sensitivity to Smad signaling pathways. Reporter assays in HepG2 cells showed a moderate activation of 2kΔN by Smad2 and IκB kinase α (IKKα), partners of the newly identified keratinocyte-specific transforming growth factor β (TGF-β) signaling, but not by other Smad molecules. In A431 cells, 2kΔN was activated by Smad2 and IKKα, for which a Smad binding element (SMD2) at -204 was essential. Binding of Smad2 to the chromosomal SMD2 site was detectable. The association of Smad2 with IKKα was evident in the nucleus of A431, accounting for the enhancement of ΔNp63 expression by TGF-β. Moreover, both ΔNp63 and IKKα were necessary to maintain the noninvasive phenotype of this cell line. FaDu, an invasive, Smad4-deficient SCC, also allowed 2kΔN transactivation by transfected Smad2 in the presence of endogenous IKKα. Reflecting the lack of chromosomal SMD2-Smad2 association and the absence of nuclear IKKα, however, endogenous ΔNp63 was not controlled by TGF-β or IKKα in FaDu. SCC tissue arrays showed nuclear accumulation of IKKα and p63 intensification in well-differentiated noninvasive lesions. This study indicates that p63 is a target gene of the proposed keratinocyte-specific TGF-β signal pathway for suppression of the malignant conversion of SCC.