Transcription factor c-Jun plays a key role in controlling epithelium cell proliferation, apoptosis and differentiation. However, molecular mechanism and biological functions of c-Jun in squamous differentiation and the progression of esophageal squamous cell carcinoma (ESCC) remain elusive. In this study, we found that c-Jun bound directly to the promoter region, and activated the transcription of differentiation-associated genes including cystatin A, involucrin and SPRR3 in vivo. Ectopic expression of c-Jun enhanced SPRR3 transactivation in KYSE450 cells. Conversely, TAM67, a dominant negative mutant of c-Jun, inhibited SPRR3 transactivation. c-Jun increased expression of SPPR3 mainly via a PKC/JNK pathway in response to TPA in KYSE450 cells. Furthermore, c-Jun was remarkably reduced in esophageal cancer. Interestingly, cystatin A, involucrin and SPRR3 were significantly downregulated as well, and associated with differentiation grade. Expression of c-Jun was correlated with the expression of these genes in normal epithelium and ESCC. Importantly, the expression of these genes was remarkably decreased during the malignant transformation from normal epithelium to low-grade intraepithelial neoplasia (LGIN) or high-grade intraepithelial neoplasia (HGIN). The expression of cystatin A and involucrin was significantly reduced from LGIN to HGIN. These results suggest c-Jun was involved in the regulation of differentiation-associated genes in ESCC. These genes might serve as the potential markers in distinguishing normal epithelium from esophageal squamous intraepithelial neoplasia.