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<i>Citrus sudachi</i> is a well-known fruit in Tokushima Prefecture, Japan, and its peels are rich in phytochemicals, including phenolic compounds. Although it is expected that the extract of the <i>C. sudachi</i> peel elicits various beneficial physiological activities, the effect on the skin has not been investigated. In this study, we report that the aqueous extract from the peel of <i>C. sudachi</i> suppresses cell proliferation of the immortalized human keratinocyte cell line, HaCaT, and primary normal human epidermal keratinocytes. The extract of <i>C. sudachi</i> peel suppressed epidermal growth factor (EGF)-induced EGF receptor activation and tumor necrosis factor (TNF)-α-induced extracellular regulated kinase (ERK) 1/2 activation, which suggests that the extract exerts its inhibitory effect through inhibition of both the EGF receptor (EGFR) and its downstream molecules. Additionally, the extract of <i>C. sudachi</i> peel potentiated calcium-induced keratinocyte differentiation. These results suggest that the extract of <i>C. sudachi</i> peel may have beneficial effects against skin diseases that are characterized by hyperproliferation of epidermal keratinocytes, such as those seen in psoriasis and in cutaneous squamous cell carcinoma.