The primary function of the epidermis is to produce the protective, semi-permeable stratum corneum that permits terrestrial life. The barrier function of the stratum corneum is provided by patterned lipid lamellae localized to the extracellular spaces between corneocytes. Anucleate corneocytes contain keratin filaments bound to a peripheral cornified envelope composed of cross-linked proteins. The many layers of these specialized cells in the stratum corneum provide a tough and resilient framework for the intercellular lipid lamellae. The lamellae are derived from disk-like lipid membranes extruded from lamellar granules into the intercellular spaces of the upper granular layer. Lysosomal and other enzymes present in the extracellular compartment are responsible for the lipid remodeling required to generate the barrier lamellae as well as for the reactions that result in desquamation. Lamellar granules likely originate from the Golgi apparatus and are currently thought to be elements of the tubulo-vesicular trans-Golgi network. The regulation of barrier lipid synthesis has been studied in a variety of models, with induction of several enzymes demonstrated during fetal development and keratinocyte differentiation, but an understanding of this process at the molecular genetic level awaits further study. Certain genetic defects in lipid metabolism or in the protein components of the stratum corneum produce scaly or ichthyotic skin with abnormal barrier lipid structure and function. The inflammatory skin diseases psoriasis and atopic dermatitis also show decreased barrier function, but the underlying mechanisms remain under investigation. Topically applied "moisturizers" work by acting as humectants or by providing an artificial barrier to trans-epidermal water loss; current work has focused on developing a more physiologic mix of lipids for topical application to skin. Recent studies in genetically engineered mice have suggested an unexpected role for tight junctions in epidermal barrier function and further developments in this area are expected. Ultimately, more sophisticated understanding of epidermal barrier function will lead to more rational therapy of a host of skin conditions in which the barrier is impaired.