Transcription factor involved in epithelial development (PubMed:15705857). Binds directly to the consensus DNA sequence 5'-AACCGGTT-3' and modulates expression of epidermal-specific genes, including XK81A1 (PubMed:15705857). Important regulator of DSG1 in the context of epidermal differentiation. Regulates the maintenance of skin barrier. No genetic interaction with GRHL3, no functional cooperativity due to diverse target gene selectivity during epithelia development (By similarity). Functions downstream of BMP-signaling cascade modulating endogenous bmp4-responsive targets (PubMed:15705857). Binds DNA as homodimer. After fertilization, expressed at the animal pole. Expression becomes restricted to the non-neuronal ectoderm of the embryo with progression through gastrulation and neurulation. Expression is observed only in the most superficial cellular layer of the embryo, being absent from the neural plate At later stages, expression is restricted to tissues with an epidermal fate. Defects in grhl1 are the cause of defective epidermal differentiation. GRHL genes (GRHL1, GRHL2 and GRHL3) show a paradoxal lack of redundancy despite their extensive sequence identity in the DNA-binding and protein dimerization domains and the fact that the core consensus DNA binding sites are identical. They have related but remarkably different functions during embryogenesis because of their differential spatiotemporal expression patterns during development. Belongs to the grh/CP2 family. Grainyhead subfamily.