The transcription factor p63 is a key mediator of epidermal commitment, development, and differentiation. Point mutations in p63 in human patients lead to developmental defects, including orofacial clefting, one of the most common congenital defects in humans. To date, knowledge is limited about how pivotal is p63’s role in human craniofacial development, due in part to a lack of tractable models to study de novo expression of p63 and its role at developmentally regulated genes. Using an inducible trans-differentiation model, combined with epigenomic sequencing and multi-cohort meta-analysis of GWAS data, we show that p63 establishes enhancers at craniofacial development genes to modulate their transcription. We further identify histone methyltransferase KMT2D as a key interacting partner of p63 at these enhancers and identify a novel role for this histone methyltransferase in maintaining epithelial homeostasis. Our results demonstrate that disease-specific substitution mutation in the DNA binding domain or SAM protein interaction domain of p63 respectively eliminate or reduce establishment of these enhancers. Finally, we show enhancers established by p63 are highly enriched for SNPs associated with nonsyndromic cleft lip +/- cleft palate (CL/P). These orthogonal approaches indicate a strong molecular link between p63 enhancer function and CL/P, illuminating molecular mechanisms underlying this developmental defect and revealing vital regulatory elements and new candidate causative genes.