Stratum corneum (SC), the outermost and least permeable layer of skin, is the major barrier to passive transepidermal water loss. In the research described in this paper, we have used human keratinocyte cultures, grown at the air-liquid (A/L) interface, to examine the relationship between epidermal differentiation (including SC formation) and barrier function. Histologically, the A/L culture showed several markers of complete differentiation, including the presence of well-organized and defined epidermal cell layers, keratohyalin granules, and a multilayered SC. The permeability of tritiated water through epidermal cultures, which had grown for 3 weeks at the A/L interface, was measured with a microdiffusion apparatus. The results of these experiments demonstrated that: a) the human keratinocyte cultures developed a substantial barrier (i.e., a multilayered SC) to water diffusion across the entire surface. If the relative humidity of the culturing environment was lowered from 100% to around 75%, the barrier was significantly improved; b) the differentiation promoter, 1.25-dihydroxy-vitamin-D3, increased the number of SC layers and reduced water permeation through the culture; c) the nature of the keratinocyte support matrix could be altered to improve the morphology as well as the barrier function of the epidermal cultures. Overall, the observations are consistent with the relationship that is believed to exist between SC intercellular lipid content and percutaneous penetration. Confirmation of this hypothesis will further the considerable potential of human keratinocyte A/L cultures as a valuable and relevant model in which to study drug absorption and metabolism.