The primary function of the skin is to protect the body for unwanted influences from the environment. The main barrier of the skin is located in the outermost layer of the skin, the stratum corneum. The stratum corneum consists of corneocytes surrounded by lipid regions. As most drugs applied onto the skin permeate along the lipid domains, the lipid organization is considered to be very important for the skin barrier function. It is for this reason that the lipid organization has been investigated quite extensively. Due to the exceptional stratum corneum lipid composition, with long chain ceramides, free fatty acids and cholesterol as main lipid classes, the lipid organization is different from that of other biological membranes. In stratum corneum, two lamellar phases are present with repeat distances of approximately 6 and 13 nm. Moreover the lipids in the lamellar phases form predominantly crystalline lateral phases, but most probably a subpopulation of lipids forms a liquid phase. Diseased skin is often characterized by a reduced barrier function and an altered lipid composition and organization. In order to understand the aberrant lipid organization in diseased skin, information on the relation between lipid composition and organization is crucial. However, due to its complexity and inter-individual variability, the use of native stratum corneum does not allow detailed systematic studies. To circumvent this problem, mixtures prepared with stratum corneum lipids can be used. In this paper first the lipid organization in stratum corneum of normal and diseased skin is described. Then the role the various lipid classes play in stratum corneum lipid organization and barrier function has been discussed. Finally, the information on the role various lipid classes play in lipid phase behavior has been used to interpret the changes in lipid organization and barrier properties of diseased skin.