The protein encoded by the C1orf10 gene was described to be esophageal-specific and a marker for cancer development. This protein, however, has the previously unreported structural features of the "fused gene" family combining sequences and structural similarities of both the S100 proteins and precursor proteins of the cornified cell envelope as in profilaggrin, trichohyalin, and repetin. Since all members of this family are expressed in keratinocytes, we suspected a role in epidermal differentiation and named the protein cornulin. Here, we report that human cornulin mRNA is expressed primarily in the upper layers of differentiated squamous tissues including the epidermis. Using polyclonal peptide antibodies, we show that cornulin is expressed in the granular and lower cornified cell layers of scalp epidermis and foreskin, as well as in calcium-induced differentiated cultured keratinocytes. Ca(2+)-overlay assay indicated that EF-hand domains of cornulin are functional and bind calcium. In HeLa cells, cornulin, co-transfected with transglutaminase 1, was diffusely distributed throughout the cytoplasm in contrast to small proline-rich 4, which localized to the cell periphery. We conclude that cornulin is a new member of the "fused gene" family, does not appear to be a precursor of the cornified cell envelope by itself, and is a marker of late epidermal differentiation.