The skin forms an effective barrier between the organism and the environment preventing invasion of pathogens and fending off chemical and physical assaults, as well as the unregulated loss of water and solutes. In this review we provide an overview of several components of the physical barrier, explaining how barrier function is regulated and altered in dermatoses. The physical barrier is mainly localized in the stratum corneum (SC) and consists of protein-enriched cells (corneocytes with cornified envelope and cytoskeletal elements, as well as corneodesmosomes) and lipid-enriched intercellular domains. The nucleated epidermis also contributes to the barrier through tight, gap and adherens junctions, as well as through desmosomes and cytoskeletal elements. During epidermal differentiation lipids are synthesized in the keratinocytes and extruded into the extracellular domains, where they form extracellular lipid-enriched layers. The cornified cell envelope, a tough protein/lipid polymer structure, resides below the cytoplasmic membrane on the exterior of the corneocytes. Ceramides A and B are covalently bound to cornified envelope proteins and form the backbone for the subsequent addition of free ceramides, free fatty acids and cholesterol in the SC. Filaggrin is cross-linked to the cornified envelope and aggregates keratin filaments into macrofibrils. Formation and maintenance of barrier function is influenced by cytokines, 3',5'-cyclic adenosine monophosphate and calcium. Changes in epidermal differentiation and lipid composition lead to a disturbed skin barrier, which allows the entry of environmental allergens, immunological reaction and inflammation in atopic dermatitis. A disturbed skin barrier is important for the pathogenesis of contact dermatitis, ichthyosis, psoriasis and atopic dermatitis.