The stratum corneum of the cholesteatoma epithelium comprises the greater part of the cholesteatoma matrix. The permeability barrier that militates against diffusion and penetration of infectious and toxic agents into and through the epithelium is situated here. The multiple long sheets of lamellar lipid structures filling the intercellular spaces mainly control the barrier function. The barrier in cholesteatoma epithelium is several times thicker than in unaffected skin but presents distinctive features of a defective barrier as seen in other scaling skin diseases. The intercellular spaces appear rather twisted, and the extra-cellular barrier is not found until well above the stratum granulosum/stratum corneum interface; thus, the transformation from secreted Odland-body contents is disturbed. Large dilatations of the extra-cellular space that are sometimes filled with an electron-dense material frequently occur. The corneocytes are shed in clusters, not as single cells. Further, lipid droplets and intracellular membranous material are occasionally seen. In spite of these clear signs of barrier dysfunction, it is unknown whether the thickness of the barrier compensates for the defect in barrier efficiency. Despite this, one cannot determine whether the stimulus to the increased lipid metabolic activity originates from the middle ear or from the ear canal.