Morphologic distinction of high-grade adenoid cystic carcinoma from basaloid squamous cell carcinoma can be difficult. Equivocal diagnoses can mislead treatment. We have investigated the possibility that immunohistochemical staining for the presence of p63, a novel epithelial stem-cell regulatory protein, could be a useful means of distinguishing these two neoplasms. Archival, routinely processed slides were subjected to citrate-based antigen retrieval, exposure to anti-p63 monoclonal 4A4, and developed with a streptavidin-biotin kit and diaminobenzidine as chromogen. p63 was detected in 100% of the adenoid cystic carcinomas (n=14) and 100% of basaloid squamous cell carcinomas (n=16). Basaloid squamous cell carcinomas consistently displayed diffuse p63 positivity, with staining of nearly 100% of tumor cells. In contrast, adenoid cystic carcinoma displayed a consistently compartmentalized pattern within tumor nests. Compartmentalization was manifested in two patterns: (1) selective staining of a single peripheral layer of p63-positive cells surrounding centrally located tumor cells that were p63-negative and (2) tumor nests consisting of multiple contiguous glandular/cribriform-like units of p63-positive cells surrounding or interspersed with p63-negative cells. p63 immunostaining constitutes a specific and accurate means of distinguishing adenoid cystic carcinoma from basaloid squamous cell carcinoma. p63 positivity in adenoid cystic carcinoma appears to be homologous to that seen in the basal and/or myoepithelial compartments of salivary gland and other epithelia, and may signify a stem-cell-like role for these peripheral cells. Diffuse p63 positivity in basaloid squamous cell carcinoma suggests dysregulation of p63-positive stem cells in poorly differentiated squamous carcinoma.