Nuclear degradation is a key stage in keratinocyte terminal differentiation and the formation of the cornified envelope that comprises the majority of epidermal barrier function. Parakeratosis, the retention of nuclear material in the cornified layer of the epidermis, is a common histological observation in many skin diseases, notably in atopic dermatitis and psoriasis. Keratinocyte nuclear degradation is not well characterised, and it is unclear whether the retained nuclei contribute to the altered epidermal differentiation seen in eczema and psoriasis. Loss of AKT1 function strongly correlated with parakeratosis both in eczema samples and in organotypic culture models. Although levels of DNAses, including DNase1L2, were unchanged, proteomic analysis revealed an increase in Lamin A/C. AKT phosphorylates Lamin A/C, targeting it for degradation. Consistent with this, Lamin A/C degradation was inhibited and Lamin A/C was observed in the cornified layer of AKT1 knockdown organotypic cultures, surrounding retained nuclear material. Using AKT-phosphorylation-dead Lamin A constructs we show that the retention of nuclear material is sufficient to cause profound changes in epidermal terminal differentiation, specifically a reduction in Loricrin, Keratin 1, Keratin 10, and filaggrin expression. We show that preventing nuclear degradation upregulates BMP2 expression and SMAD1 signalling. Consistent with these data, we observe both parakeratosis and evidence of increased SMAD1 signalling in atopic dermatitis. We therefore present a model that, in the absence of AKT1-mediated Lamin A/C degradation, DNA degradation processes, such as those mediated by DNAse 1L2, are prevented, leading to parakeratosis and changes in epidermal differentiation. Nuclear degradation is a key stage in keratinocyte terminal differentiation and the formation of the cornified envelope that comprises the majority of epidermal barrier function. [1][2][3] Parakeratosis, the retention of nuclear material in the cornified layer of the epidermis, is a common histological observation in many skin diseases, but most notably in the epidermal barrierdefective diseases eczema and psoriasis. 4,5 Mechanisms of nuclear degradation in the epidermis have not yet been well characterised and it is not known whether the retained nuclei contribute to the altered epidermal differentiation programmes seen in these skin diseases. 6,7 It is surprising that, for such a critical component of epidermal terminal differentiation, relatively few molecular mechanisms inducing parakeratosis have been investigated. The caspase-14 knockout mouse develops parakeratotic plaques upon chemical barrier disruption 8 and has subtle defects in epidermal terminal differentiation, including filaggrin processing, 9 whereas the DNAse 1L2 knockout mouse showed constitutive nuclear retention in hair and nails, which led to structural abnormalities in the hair shaft. 10,11 Parakeratosis also occurs during wound healing. 12 Nuclei are retained in the scab of healing wounds, and this correlates with...