Specimens from primary cholesteatomas were examined under the electron microscope using a lipid-retaining method that is best suited for intracellular lipids and a method that is best for intercellular lipids. In the stratum granulosum of the squamous epithelium, a large number of Odland bodies emerged. When the corneocyte reaches the transitional stage to the stratum corneum, the Odland bodies accumulate near the cell membrane and discharge their contents of lipid and enzymes. The lipids are reorganized into multiple long sheets of lamellar structures that embrace the keratinized corneocytes, as seen in the formation and maintenance of the cutaneous permeability barrier. In this study we draw the attention to the facts that the cholesteatoma epithelium is capable of producing not only cholesterol, but also several lipids, and that the lipid molecules are organized in multilamellar structures in the intercellular space. In theory, the failure to desquamate seen in cholesteatomas could be caused by partial or total failure of Odland body delivery to the intercellular region, or to local breakdown of the permeability barrier.