The epidermis and skin appendages are maintained by their resident epithelial stem cells, which undergo long‐term self‐renewal and multilineage differentiation. Upon injury, stem cells are activated to mediate re‐epithelialization and restore tissue function. During this process, they often mount lineage plasticity and expand their fates in response to damage signals. Stem cell function is tightly controlled by transcription machineries and signalling transductions, many of which derail in degenerative, inflammatory and malignant dermatologic diseases. Here, by describing both well‐characterized and newly emerged pathways, we discuss the transcriptional and signalling mechanisms governing skin epithelial homeostasis, wound repair and squamous cancer. Throughout, we highlight common themes underscoring epithelial stem cell plasticity and tissue‐level crosstalk in the context of skin physiology and pathology. [ABSTRACT FROM AUTHOR]