Stearoyl-CoA desaturase (SCD) is a microsomal rate-limiting enzyme in the cellular synthesis of monounsaturated fatty acids (MUFA), mainly oleate (18:1) and palmitoleate (16:1), which are the major MUFA of membrane phospholipids, cholesterol esters and triglycerides. Three well-characterized isoforms of SCD, SCD1, SCD2 and SCD3, exist in mice. To investigate the physiologic functions of SCD1, we generated SCD1 null (SCD1-/-) mice. The skin and eyelid of SCD1-/- mice are deficient in triglycerides and cholesterol esters, and the eyelid also is deficient in wax esters. Furthermore, the eyelid and skin of SCD1-/- mice have higher levels of free cholesterol. SCD1-/- mice develop cutaneous abnormalities and narrow eye fissure with atrophic sebaceous and meibomian glands. Consumption of diets containing high levels of oleate, failed to restore the levels of triglycerides, cholesterol esters and wax esters in SCD1-/- mice to the levels found in the eyelid of wild-type mice. These results reveal a physiologic role of SCD in cholesterol homeostasis as well as in the de novo biosynthesis of cholesterol esters, triglycerides and wax esters required for normal skin and eyelid function.