We performed multi-omic profiling of epidermal keratinocytes, precancerous actinic keratoses, and squamous cell carcinomas to understand the molecular transitions during skin carcinogenesis. Single-cell mutational analyses showed that most keratinocytes in normal skin had lower mutation burdens than melanocytes and fibroblasts, however keratinocytes with TP53 or NOTCH1 mutations had substantially higher mutation burdens, suggesting that these mutations prime keratinocytes for transformation by increasing their mutation rate. Mutational profiling and spatial transcriptomics on squamous cell carcinomas adjacent to actinic keratoses revealed TERT promoter and CDKN2A mutations emerging in actinic keratoses, whereas additional mutations inactivating ARID2 and activating the MAPK-pathway delineated the transition to squamous cell carcinomas. Spatial variation in gene expression patterns was common in both tumor and immune cells, with high expression of checkpoint molecules at the invasive front of tumors. In conclusion, this study documents key events during the evolution of cutaneous squamous cell carcinoma.