Transcription factor playing an important role in primary neurulation and in epithelial development (PubMed:29309642, PubMed:25152456). Binds directly to the consensus DNA sequence 5'-AACCGGTT-3' acting as an activator and repressor on distinct target genes (By similarity). During embryogenesis, plays unique and cooperative roles with GRHL3 in establishing distinct zones of primary neurulation. Essential for closure 3 (rostral end of the forebrain), functions cooperatively with GRHL3 in closure 2 (forebrain/midbrain boundary) and posterior neuropore closure (By similarity). Regulates epithelial morphogenesis acting as a target gene-associated transcriptional activator of apical junctional complex components. Up-regulates of CLDN3 and CLDN4, as well as of RAB25, which increases the CLDN4 protein and its localization at tight junctions (By similarity). Comprises an essential component of the transcriptional machinery that establishes appropriate expression levels of CLDN4 and CDH1 in different types of epithelia. Exhibits functional redundancy with GRHL3 in epidermal morphogenetic events and epidermal wound repair (By similarity). In lung, forms a regulatory loop with NKX2-1 that coordinates lung epithelial cell morphogenesis and differentiation (By similarity). In keratinocytes, plays a role in telomerase activation during cellular proliferation, regulates TERT expression by binding to TERT promoter region and inhibiting DNA methylation at the 5'-CpG island, possibly by interfering with DNMT1 enzyme activity (PubMed:19015635, PubMed:20938050). In addition, impairs keratinocyte differentiation and epidermal function by inhibiting the expression of genes clustered at the epidermal differentiation complex (EDC) as well as GRHL1 and GRHL3 through epigenetic mechanisms (PubMed:23254293). Homodimer, also forms heterodimers with GRHL1 or GRHL3. detected at cell-cell contact areas. Expressed in keratinocytes (at protein level). Highly expressed in placenta, prostate, brain and kidney. Lower-level expression in a variety of epithelial tissues such as thymus, lung, salivary gland, mammary gland and digestive tract. Expressed in the cochlear. Expressed in corneal epithelial cells, but not in the endothelium or stroma (PubMed:29499165). Expressed in proliferating cells, the expression decreases during senescence. In keratinocytes, expression levels decrease upon calcium exposure. The disease is caused by variants affecting the gene represented in this entry. The disease is caused by variants affecting the gene represented in this entry. The disease is caused by variants affecting the gene represented in this entry. 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.