Aquaporin 3 (AQP3) is an aquaglyceroporin which transports water, glycerol and small solutes across the plasma membrane. Its functions are not limited to fluid transport but also involve the regulation of cell proliferation, migration, skin hydration, wound healing and tumorigenesis. While AQP3 has been reported to play an important role in keratinocyte proliferation, its role in differentiation remains controversial. Our study demonstrated that the expression of AQP3 was regulated during differentiation and that it participated in keratinocyte differentiation control. We further revealed that AQP3 was a transcriptional target of Notch signaling, a critical pathway regulating keratinocyte differentiation and tumor suppression, and it regulated differentiation through a reciprocal negative feedback loop with Notch1. When the expression level of AQP3 was elevated, impaired barrier integrity and increased pro-inflammatory cytokine production ensued, mimicking the pathological conditions in Notch deficient mice and in atopic dermatitis. Dysregulation of AQP3 and Notch receptors has been reported in several skin diseases, including skin cancer. Our discovery of the novel AQP3-Notch1 axis may provide insight into epidermal homeostasis control and possible translational applications, including its potential use as a biomarker for molecular diagnosis in environmental studies.