Myc is activated in many tumours, yet, paradoxically, stimulates differentiation in mammalian epidermis. To test whether the epidermis responds differently to different levels of Myc, we treated K14MycER transgenic mice with a range of concentrations of the inducing agent, 4-hydroxy-tamoxifen (4OHT). Proliferation was stimulated at all levels of Myc activity; sebocyte differentiation was stimulated at low and intermediate levels; and interfollicular epidermal differentiation at intermediate and high levels. Mutational inactivation of the Myc p21 activated kinase 2 (PAK2) phosphorylation sites increased Myc activity and further enhanced epidermal differentiation. We conclude that Myc induced differentiation acts as a fail-safe device to prevent uncontrolled proliferation and neoplastic conversion of epidermal stem cells expressing high levels of Myc.