Insulin receptor substrate (IRS) proteins play a central role in insulin signaling. Previously we have demonstrated that insulin is essential for normal skin development and function. In the present study we investigated the involvement of the IRS-1 and IRS-2 proteins in skin physiology and in mediating insulin action in skin. For this purpose we have investigated the effects of inactivation of each of the IRSs on skin, studying skin sections and primary skin cells derived from IRS-1 or IRS-2 null mice. We have demonstrated that while the skin of the IRS-2 null mice appeared normal, the skin of the IRS-1 null mice was thinner and translucent. Histological analysis revealed that the thinning of the IRS-1 null s on was a consequence of the thinning of the spinous compartment, consisting of fewer layers. Proliferation of the IRS-1 and IRS-2 null skin epidermal cells was normal. However, the differentiation process of the IRS-1 skin and skin cells was impaired. There was a marked decrease in the induction of the expression of K1, the marker of advanced stages of skin differentiation. In contrary, IRS-2 inactivatior had no effects on skin differentiation. In conclusion, we have shown for the first time that IRS-1 but not IRS-2 has an effect on skin formation and development, being one of the main activators of the differentiation process in skin keratinocytes. Furthermore, we suggest that IRS-1 and IRS-2 have distinct roles in skin physiology.