IFN regulatory factor 6 (IRF6) is a transcription factor that, in mammals, is required for the differentiation of skin, breast epithelium, and oral epithelium. However, the transcriptional targets that mediate these effects are currently unknown. In zebrafish and frog embryos, Irf6 is necessary for differentiation of the embryonic superficial epithelium, or periderm. Here we use microarrays to identify genes that are expressed in the zebrafish periderm and whose expression is inhibited by a dominant-negative variant of Irf6 (dnIrf6). These methods identify Grainyhead-like 3 (Grhl3), an ancient regulator of the epidermal permeability barrier, as acting downstream of Irf6. In human keratinocytes, IRF6 binds conserved elements near the GRHL3 promoter. We show that one of these elements has enhancer activity in human keratinocytes and zebrafish periderm, suggesting that Irf6 directly stimulates Grhl3 expression in these tissues. Simultaneous inhibition of grhl1 and grhl3 disrupts periderm differentiation in zebrafish, and, intriguingly, forced grhl3 expression restores periderm markers in both zebrafish injected with dnIrf6 and frog embryos depleted of Irf6. Finally, in Irf6-deficient mouse embryos, Grhl3 expression in the periderm and oral epithelium is virtually absent. These results indicate that Grhl3 is a key effector of Irf6 in periderm differentiation.