Although skin grafting is one of the most advanced cell therapy technique, wide application of skin substitutes is hampered by the difficulty in securing sufficient amount of epidermal substitute. Additionally, in understanding the progression of skin aging and disease, and in screening the cosmetic and pharmaceutical products, there is lack of a satisfactory human skin-specific in vitro model. Recently, human embryonic stem cells (hESCs) have been proposed as an unlimited and reliable cell source to obtain almost all cell types present in the human body. This review focuses on the potential off-the-shelf use of hESC-derived keratinocytes for future clinical applications as well as a powerful in vitro skin model to study skin function and integrity, host-pathogen interactions and disease pathogenesis. Furthermore, we discuss the industrial applications of hESC-derived keratinized multi-layer epithelium which provides a human-like test platform for understanding disease pathogenesis, evaluation of new therapeutic modalities and assessment of the safety and efficacy of skin cosmetics and therapeutics. Overall, we conclude that the hESC-derived keratinocytes have great potential for clinical, research and industrial applications.