Transglutaminases (TGases) are seven enzymes, cross-linking proteins by ␥-glutamil-⑀-lysine bonds, four of which are expressed in the skin. A new member of the TGase family, TGase 5, has been identified recently, and in the present study we evaluated its role in keratinocyte differentiation in vitro. In addition to the previously described isoforms, full-length TGase 5 and ⌬3 (deletion of exon 3), we identified two new splicing variants, ⌬11 and ⌬3⌬11 (deletion of exons 11 or 3, 11). We expressed full-length TGase 5, ⌬3, ⌬11, and ⌬3⌬11 isoforms in the keratinocyte and baculovirus systems. The results indicate that both full-length TGase 5 and ⌬11 are active, whereas ⌬3 and ⌬3⌬11 have very low activity. Expression studies show that full-length TGase 5 is induced during the early stages of keratinocyte differentiation and is differently regulated in comparison with the other epidermal TGases. Kinetic and in vitro crosslinking experiments indicate that full-length TGase 5 is very efficient in using specific epidermal substrates (loricrin, involucrin, and SPR3). In keratinocyte expression system, TGase 5 isoforms are retained in an intermediate filament-enriched fraction, suggesting its association with insoluble proteins. Indeed, TGase 5 co-localize with vimentin and it is able to cross-link vimentin in vitro.