Lipid suspensions containing 2:1:1 skin ceramides:palmitic acid:cholesterol, similar to the lipid composition found in the extracellular matrix of skin stratum corneum, were analyzed by X-ray diffraction methods. These suspensions gave a sharp wide-angle reflection at 4.1 A, indicating tight hydrocarbon chain packing that would function as a water barrier, and low-angle lamellar diffraction with a repeat period near 130 A, similar to that previously recorded from intact stratum corneum. The lamellar repeat increased from 121 A at pH 6 to 133 A at pH 8.5, allowing phase angles of the lamellar data to be obtained by a sampling theorem "swelling" analysis. Electron density profiles showed that each repeating unit contained two asymmetric bilayers, with a fluid space on one side of the bilayer that increased with increasing pH, due to electrostatic repulsion between bilayers because of ionization of the palmitic acid. Profiles obtained from lamellae with cholesterol sulfate partially substituted for cholesterol showed large density increases on that same side of the bilayer, indicating that cholesterol is asymmetrically distributed in each bilayer. A molecular model was developed postulating that this asymmetry is due to the exclusion of cholesterol from lipid monolayers containing the ester-linked unsaturated (linoleic) hydrocarbon chain of skin ceramide 1. This model can explain the altered organization of extracellular lamellae in epidermal cysts (P. W. Wertz, D. C. Swartzendruber, K. C. Madison, D. T. Downing. 1987. J. Invest. Dermatol. 89:419-425) where the ester-linked chains have a higher percentage of saturated fatty acids than found in normal epidermis.