The process of differentiation in keratinocytes is accompanied by specific membrane and cytoplasmic changes. Using simple tissue culture techniques a well differentiated squamous carcinoma cell line is shown to exhibit in vitro keratinization with the formation of a multi-layered structure and shedding of cells with a cornified envelope. The cell line produces tumours when xenografted into mice which are well differentiated and indistinguishable at the light and electron microscope level from the original surgical biopsy. It is concluded that the tumour will provide a suitable model for detailed in vitro and in vivo studies to compare both biological and pathological features of normal keratinocytes and their malignant counterparts.