The histone demethylase UTX (gene: KDM6A) directs cell and tissue differentiation during development. Deleterious mutations in KDM6A occur in many human cancers, most frequently in urothelial carcinoma. The consequences of these mutations are poorly understood; plausibly, they may disturb urothelial differentiation. We therefore investigated the effects of UTX siRNA-mediated knockdown in two in vitro models of urothelial differentiation; namely, primary cultures of urothelial epithelial cells treated with troglitazone and PD153035 and the immortalized urothelial cell line HBLAK treated with high calcium and serum. In both models, efficient UTX knockdown did not block morphological and biochemical differentiation. An apparent delay was due to a cytotoxic effect on the cell cultures before the initiation of differentiation, which induced apoptosis partly in a p53-dependent manner. As a consequence, slowly cycling, smaller, KRT14high precursor cells in the HBLAK cell line were enriched at the expense of more differentiated, larger, proliferating KRT14low cells. UTX knockdown induced apoptosis and enriched KRT14high cells in the BFTC-905 papillary urothelial carcinoma cell line as well. Our findings suggest an explanation for the frequent occurrence of KDM6A mutations across all stages and molecular subtypes of urothelial carcinoma, whereby loss of UTX function does not primarily impede later stages of urothelial differentiation, but favors the expansion of precursor populations to provide a reservoir of potential tumor-initiating cells.