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Summary Current gene expression network approaches commonly focus on transcription factors (TFs), biasing network-based discovery efforts away from potentially important non-TF proteins. We developed proximity analysis, a network reconstruction method that uses topological constraints of scale-free, small-world biological networks to reconstruct relationships in eukaryotic systems, independent of subcellular localization. Proximity analysis identified MPZL3 as a highly connected hub that is strongly induced during epidermal differentiation. MPZL3 was essential for normal differentiation, acting downstream of p63, ZNF750, KLF4, and RCOR1, each of which bound near the MPZL3 gene and controlled its expression. MPZL3 protein localized to mitochondria, where it interacted with FDXR, which was itself also found to be essential for differentiation. Together, MPZL3 and FDXR increased reactive oxygen species (ROS) to drive epidermal differentiation. ROS-induced differentiation is dependent upon promotion of FDXR enzymatic activity by MPZL3. ROS induction by the MPZL3 and FDXR mitochondrial proteins is therefore essential for epidermal differentiation. [ABSTRACT FROM AUTHOR]