Dicer is required for the maturation of microRNA, and loss of Dicer and miRNA processing has been found to alter numerous biological events during embryogenesis, including the development of mammalian skin and hair. We have previously examined the role of miRNA biogenesis in mouse embryonic fibroblasts and found that deletion of Dicer induces cell senescence regulated, in part, by the p53 tumor suppressor. Although Dicer and miRNA molecules are thought to have either oncogenic or tumor suppressing roles in various types of cancer, a role for Dicer and miRNAs in skin carcinogenesis has not been established. Here we show that perinatal ablation of Dicer in the skin of mice leads to loss of fur in adult mice, increased epidermal cell proliferation and apoptosis, and the accumulation of widespread DNA damage in epidermal cells. Co-ablation of Dicer and p53 did not alter the timing or extent of fur loss, but greatly reduced survival of Dicer-skin ablated mice, as these mice developed multiple and highly aggressive skin carcinomas. Our results describe a new mouse model for spontaneous basal and squamous cell tumorigenesis. Furthermore, our findings reveal that loss of Dicer in the epidermis induces extensive DNA damage, activation of the DNA damage response and p53-dependent apoptosis, and that Dicer and p53 cooperate to suppress mammalian skin carcinogenesis.