To investigate tumour progression mechanism in transgenic mouse skin carcinogenesis, inducible PTEN ablation (Δ5PTEN(flx)) was targeted to the epidermis of mice expressing activated ras(Ha)/fos oncogenes (HK1.ras and HK1.fos). RU486-treated HK1.ras/fos-Δ5PTEN(flx) epidermis exhibited significant keratinocyte proliferation resulting in hyperplasia and proliferating cysts. While HK1.ras/fos-Δ5PTEN(flx) papillomatogenesis was accelerated, malignant conversion was delayed and tumours exhibited well-differentiated squamous cell carcinoma (wdSCC) histotypes, suggesting inhibition of early-stage malignant progression. Immediate elevated p53/p21 expression was observed in HK1.ras/fos-Δ5PTEN(flx) hyperplasia, cysts and papillomas, and while malignant conversion required p53 loss, elevated p21 expression persisted in most wdSCCs to limit further progression, unless p21 was also lost and wdSCC progressed to more aggressive carcinomas. In contrast, TPA-promoted (that is, c-fos-activated) bi-genic HK1.ras-Δ5PTEN(flx) cohorts lost p53/p21 expression during early papillomatogenesis and rapidly produced poorly differentiated carcinomas (pdSCCs) with high BrdU-labelling and elevated cyclin D1/E2 expression levels, indicative of a progression mechanism driven by failures in cell-cycle control. Intriguingly, HK1.ras/fos-Δ5PTEN(flx) wdSCCs did not exhibit similar failures, as western and immunofluorescence analysis found downregulated cyclin E2 whenever p21 persisted; further, while westerns detected elevated cyclin D1, immunofluorescence identified reduced expression in proliferative basal layer nuclei and a redistributed expression profile throughout p21-positive wdSCC keratinocytes. These data demonstrate that rapid early epidermal responses to ras(Ha)/fos/ΔPTEN co-operation involve induction of p53/p21 to alter differentiation and divert excessive proliferation into cyst formation. Further, despite three potent oncogenic insults p53 loss was required for malignant conversion, and following p53 loss persistent, p53-independent p21 expression possessed the potency to limit early-stage malignant progression via cyclin D1/E2 inhibition.