Ceramides and phospholipids constitute two important structural lipids of normal skin that are notably rich in polyunsaturated fatty acids. Although linoleic acid (LA) is high in the ceramides, the localization of its 15-lipoxygenase product, 13-hydroxyoctadecadienoic acid (13-HODE) in the epidermis is unknown. In this study, we investigated the relative incorporation of [14C]LA and [14C]13-HODE into ceramides and phospholipids in isolated epidermal slices. Our data revealed minor incorporation of [14C]LA and [14C]13-HODE into ceramides. In contrast, both [14C]LA and [14C]13-HODE are markedly incorporated into phospholipids, particularly, phosphatidylcholine (PC) and phosphatidylinositol (PtdIns). The incorporation of 13-HODE into the PtdIns pool in particular prompted us to investigate into its fate in the signal transduction process and its possible incorporation into diacylglycerol. Our data revealed that 13-HODE is incorporated into epidermal phosphatidylinositol 4,5-bisphosphate (PtdIns4,5-P2) resulting in epidermal phospholipase C-catalyzed release into a novel 13-HODE-containing diacylglycerol (1-acyl-2-13-HODE-glycerol). The possibility now exists that this novel 13-HODE-containing diacylglycerol could function to modulate the activity of epidermal protein kinase C and hyperproliferation/differentiation.