The p53 family of transcription factors (p53, p63 and p73) regulate diverse organismal processes including tumor suppression, maintenance of genome integrity and the development of skin and limbs. Crosstalk between transcription factors with highly similar DNA binding profiles, like those in the p53 family, can dramatically alter gene regulation. While p53 is primarily associated with transcriptional activation, p63 mediates both activation and repression. The specific mechanisms controlling p63-dependent gene regulatory activity are not well understood. Here, we use massively parallel reporter assays (MPRA) to investigate how local DNA sequence context influences p63-dependent transcriptional activity. Most regulatory elements with a p63 response element motif (p63RE) activate transcription, although binding of the p63 paralog, p53, drives a substantial proportion of that activity. p63RE sequence content and co-enrichment with other known activating and repressing transcription factors, including lineage-specific factors, correlates with differential p63RE-mediated activities. p63 isoforms dramatically alter transcriptional behavior, primarily shifting inactive regulatory elements towards high p63-dependent activity. Our analysis provides novel insight into how local sequence and cellular context influences p63-dependent behaviors and highlights the key, yet still understudied, role of transcription factor paralogs and isoforms in controlling gene regulatory element activity.