Epidermis is one of the best-studied tissues in mammals that contain types of stem cells. Outstanding works in recent years have shed great light on behaviors of different epidermal stem cell populations in the homeostasis and regeneration of the epidermis as well as hair follicles. Also, the molecular mechanisms governing these stem cells are being elucidated, from genetic to epigenetic levels. Compared with the explicit knowledge about adult skin, embryonic development of the epidermis, especially the early period, still needs exploration. Furthermore, stem cells in the embryonic epidermis are largely unstudied or ambiguously depicted. In this review, we will summarize and discuss the process of embryonic epidermal development, with focuses on some key molecular regulators and the role of the sub-epidermal mesenchyme. We will also try to trace adult epidermal stem cell populations back to embryonic development. In addition, we will comment on in vitro derivation of epidermal lineages from ES cells and iPS cells.