The epidermis is a multi-layered organ which functions as a protective barrier from the environment. Keratinocytes form the epidermis in a tightly regulated process of terminal differentiation. Dysregulation of this process leads to hyperproliferative disease. TIG3 is a tumor suppressor in the H-rev107 family, which was identified as having elevated expression following treatment with the psoriasis drug, tazarotene. Levels of TIG3 are decreased in diseases associated with hyperproliferation like psoriasis and skin cancer. Restoration of TIG3 expression in these diseases results in a reduction of cell proliferation rate and normalization of the disease phenotype. In normal epidermis, TIG3 is expressed in the suprabasal epidermal layers and is associated with cessation of cell proliferation and activation of type I transglutaminase. Here we characterize the impact of restoring TIG3 expression in skin cancer cell lines and in normal keratinocytes. We observe that in skin cancer cells, TIG3 halts cell cycle progression at the G1/S phase and induces apoptosis. This is associated with the novel finding that TIG3 associates at the centrosome, which is also observed in normal keratinocytes. TIG3 distribution to the centrosome is essential for its function and it acts by altering the function of the centrosome. We observe a dramatic reorganization of the microtubule network and a reduction in centrosome separation and cell division. We have also identified the region of TIG3 (amino acids 102 - 125) responsible for TIG3 centrosome localization. This region contains the highly conserved NC and LRYG motifs and we show that mutation of these conserved elements prevent distribution to the centrosome. Tazarotene has been successfully used clinically to treat psoriasis and nonmelanoma skin cancers, indicating the potential role for TIG3 as a mediator of drug action. These studies support this concept by identifying the mechanisms of TIG3 action.