p63 is critical for squamous epithelial development, and elevated levels of the ΔNp63α isoform are seen in squamous cell cancers of various organ sites. However, significant controversy exists regarding the role of p63 isoforms as oncoproteins or tumor suppressors. Here, lentiviruses were developed to drive long-term overexpression of ΔNp63α in primary keratinocytes. Elevated levels of ΔNp63α in vitro promote long-term survival and block both replicative and oncogene-induced senescence in primary keratinocytes, as evidenced by the expression of SA-β-gal and the presence of nuclear foci of heterochromatin protein 1γ. The contribution of ΔNp63α to cancer development was assessed using an in vivo grafting model of experimental skin tumorigenesis that allows distinction between benign and malignant tumors. Grafted lenti-ΔNp63α keratinocytes do not form tumors, whereas lenti-GFP/v-ras(Ha) keratinocytes develop well-differentiated papillomas. Lenti-ΔNp63α/v-ras(Ha) keratinocytes form undifferentiated carcinomas. The average volume of lenti-ΔNp63α/v-ras(Ha) tumors was significantly higher than those in the lenti-GFP/v-ras(Ha) group, consistent with increased BrdU incorporation detected by immunohistochemistry. The block in oncogene-induced senescence corresponds to sustained levels of E2F1 and phosphorylated AKT, and is associated with loss of induction of p16(ink4a)/p19(arf). The relevance of p16(ink4a)/p19(arf) loss was demonstrated in grafting studies of p19(arf)-null keratinocytes, which develop malignant carcinomas in the presence of v-ras(Ha) similar to those arising in wildtype keratinocytes that express lenti-ΔNp63α and v-ras(Ha). Our findings establish that ΔNp63α has oncogenic activity and its overexpression in human squamous cell carcinomas contributes to the malignant phenotype, and implicate its ability to regulate p16(ink4a)/p19(arf) in the process.