Varicella zoster virus (VZV) is the etiological agent of chickenpox and shingles, diseases characterized by epidermal skin blistering. Using a calcium-induced keratinocyte differentiation model we investigated the interaction between epidermal differentiation and VZV infection. RNA-seq analysis showed that VZV infection has a profound effect on differentiating keratinocytes, altering the normal process of epidermal gene expression to generate a signature that resembles patterns of gene expression seen in both heritable and acquired skin-blistering disorders. Further investigation by real-time PCR, protein analysis and electron microscopy revealed that VZV specifically reduced expression of specific suprabasal cytokeratins and desmosomal proteins, leading to disruption of epidermal structure and function. These changes were accompanied by an upregulation of kallikreins and serine proteases. Taken together VZV infection promotes blistering and desquamation of the epidermis, both of which are necessary to the viral spread and pathogenesis. At the same time, analysis of the viral transcriptome provided evidence that VZV gene expression was significantly increased following calcium treatment of keratinocytes. Using reporter viruses and immunohistochemistry we confirmed that VZV gene and protein expression in skin is linked with cellular differentiation. These studies highlight the intimate host-pathogen interaction following VZV infection of skin and provide insight into the mechanisms by which VZV remodels the epidermal environment to promote its own replication and spread.