During human skin development, embryonic- and fetal-specific periderm cells and incompletely keratinized cells are replaced by keratinocytes that differentiate while stratifying to form the fully functional epidermis. Proliferating basal cells of fetal skin also develop into epidermal appendages such as hair follicles and glands. We demonstrate that programmed cell death, not emphasized in conventional epidermal biology, has an important function in establishing the final architecture of the human epidermis and its appendages. Immunohistochemical localization of transglutaminases in fetal periderm, intermediate epidermal cells, and within appendages coincides with DNA fragmentation indicating that apoptosis is involved in deletion of these stage-specific cells and remodeling of appendages. The data also suggest that terminal differentiation of epidermal cells might be a specialized form of apoptosis. The pattern of expression of bcl-2, a gene associated with survival of some cells, is exclusive of the distribution patterns of markers of the cell death pathway. Bcl-2 protein is correlated with specific morphogenetic events in hair follicles and eccrine sweat glands, and its presence in single cells of the hair follicle bulge suggests that Bcl-2 may be a stem cell marker.