Epithelial tissues rely on a highly coordinated balance between self-renewal, proliferation, and differentiation, disruption of which may drive carcinogenesis. The epigenetic regulator KMT2D (MLL4) is one of the most frequently mutated genes in all cancers, particularly epithelial cancers, yet its normal function in these tissues is unknown. Here, we identify a novel role for KMT2D in coordinating this fine balance, as depletion of KMT2D from undifferentiated epidermal keratinocytes results in reduced proliferation, premature spurious activation of terminal differentiation genes, and disorganized epidermal stratification. Genome-wide, KMT2D interacts with p63 and is enriched at its target enhancers. Depletion of KMT2D results in a broad loss of enhancer histone modifications H3 Lys 4 (H3K4) monomethylation (H3K4me1) and H3K27 acetylation (H3K27ac) as well as reduced expression of p63 target genes, including key genes involved in epithelial development and adhesion. Together, these results reveal a critical role for KMT2D in the control of epithelial enhancers and p63 target gene expression, including the requirement of KMT2D for the maintenance of epithelial progenitor gene expression and the coordination of proper terminal differentiation.