While it is well known that a balanced level of hydration is fundamental for healthy skin, the physiological mechanisms underlying the control of hydration, particularly in the epidermis, are yet to be fully elucidated. Over the past 10 years, much research has been carried out to understand the nature and regulation of the water gradient that exists across the layers of the epidermis. Of central importance is the role played by membrane-bound pores called aquaporins, which facilitate the passage of water and, in some cases, small molecules such as glycerol. This paper provides an overview of the principal aquaporin present in the epidermis, aquaporin 3, and how the level of hydration of the epidermis is correlated to endogenous levels of glycerol and to the distribution of aquaporin 3 channels. The role of aquaporin 3 in skin diseases is considered along with possible clinical implications of aquaporin 3 modulation.