Mutations in genes encoding epidermal keratins cause skin disorders, while those in internal epithelial keratins, such as K8 and K18, are risk factors for liver diseases. The effect of dominant mutations in K8 or K18 during embryonic development and tissue homeostasis has not been examined so far. Here we demonstrate that the dominant mutation hK18 R89C, that is highly similar to hK14 R125C, causing EBS in humans, leads to cell type-specific lethality in mice, depending on the ratio of mutant to endogenous keratins. Mice expressing hK18 R89C in the absence of endogenous K19 and K18 died at mid-gestation from defects in trophoblast giant cells, accompanied by haematomas. A single, endogenous K18 allele rescued embryonic lethality but caused aggregation of keratins in all adult internal epithelia, surprisingly without spontaneous cell fragility. Closer analysis revealed that both filaments and aggregates coexisted in the same cell, depending on the ratio of mutant to endogenous keratins. Our results demonstrate that balanced overexpression of a wild-type keratin rescued the lethal consequences of a dominant-negative mutation. This has important implications for therapy approaches of keratinopathies, suggesting that suppressing the mutant allele is not necessary in vivo.