The regulatory circuits that coordinate epidermal differentiation during development are still not fully understood. Here, we report that the transcriptional regulator ID1 is enriched in mouse basal epidermal progenitor cells and find ID1 expression to be diminished upon differentiation. In utero silencing of Id1 impairs progenitor cell proliferation, leads to precocious delamination of targeted progenitor cells and enables differentiated keratinocytes to retain progenitor markers and characteristics. Transcriptional profiling suggests that ID1 acts by mediating adhesion to the basement membrane while inhibiting spinous layer differentiation. Co-immunoprecipitation reveals ID1 binding to transcriptional regulators of the class I bHLH family. We localize bHLH Tcf3, Tcf4 and Tcf12 to epidermal progenitor cells during epidermal stratification and establish TCF3 as a downstream effector of ID1-mediated epidermal proliferation. Finally, we identify crosstalk between CEBPA, a known mediator of epidermal differentiation, and Id1, and demonstrate that CEBPA antagonizes BMP-induced activation of Id1. Our work establishes ID1 as a key coordinator of epidermal development, acting to balance progenitor proliferation with differentiation and unveils how functional crosstalk between CEBPA and Id1 orchestrates epidermal lineage progression.