Final answer:
Cell division occurs in the stratum basale layer of the epidermis, which is the deepest layer containing stem cells that generate new keratinocytes and melanocytes that produce melanin.
Step-by-step explanation:
Cell division occurs in the stratum basale layer of the epidermis. This is the deepest layer of the epidermis and contains stem cells that are responsible for generating new keratinocytes, which are the predominant cells of the epidermis. As these new cells form, they push the older ones towards the skin's surface. The stratum basale is also home to melanocytes that produce melanin, which gives the skin its color.
The other options, like the stratum corneum and stratum lucidum, consist of dead keratinocytes that are in the process of being shed or are providing an additional barrier in areas of thick skin respectively. The stratum granulosum is where keratinocytes begin filling with keratin and start to die off, but they do not divide in this layer.