The basis for the permeability barrier abnormality in lamellar ichthyosis (LI) is not known. LI is caused by mutations in the gene that encodes the enzyme, transglutaminase 1 (TGI), which is responsible for assembly of the cornified envelope (CE). TG1 also has been suggested recently to catalyze the covalent attachment of omega-hydroxyceramides (omega-OHCer) to the CE, forming the corneocyte-lipid envelope (CLE). We first assessed the barrier function and the permeability pathway of the water-soluble tracer, colloidal lanthanum, across the stratum corneum (SC) in patients with LI with absent (n = 4) or low (n = 2) TG1 activity/protein. Increased movement of tracer through the SC correlated with increased transcutaneous water loss, and tracer remained restricted to the SC interstices. Enhanced extracellular permeability, in turn, was explicable by truncation and fragmentation of extracellular lamellar membrane arrays. The resultant clefts in the SC interstices represent the likely pathway for increased water permeability. Moreover, tracer movement remained restricted to the interstices, despite the demonstration of increased corneocyte fragility associated with widespread variations in CE structure. Regardless of variability in CE structure, however, CLE structure and bound omega-OHCer content were normal. The normal CLE in LI may explain both the restriction of tracer to the SC interstices, as well as the presence of foreshortened membrane arrays with near-normal interlamellar dimensions. Finally, the demonstration of a normal CLE in LI also raises questions about the putative role of TG1 in forming the CLE. These results demonstrate: (1) the extracellular nature of increased permeability in LI; (2) discontinuities in extracellular membrane structures that account for the enhanced permeability in LI; (3) that these membrane abnormalities are both associated with and explained by abnormalities in the subjacent CE scaffold; and (4) an intact CLE is present in LI, despite abnormalities in the CE, which may restrict water movement to the SC interstices in LI.