Mammalian epidermis produces and delivers large quantities of glucosylceramide and sphingomyelin precursors to stratum corneum extracellular domains, where they are hydrolyzed to corresponding ceramide species. This cycle of lipid precursor formation and subsequent hydrolysis represents a mechanism that protects the epidermis against potentially harmful effects of ceramide accumulation within nucleated cell layers. Prominent skin disorders, such as psoriasis and atopic dermatitis, have diminished epidermal ceramide levels, reflecting altered sphingolipid metabolism, that may contribute to disease severity/progression. Enzymatic processes in the hydrolysis of glucosylceramide and sphingomyelin, and the roles of sphingolipids in skin diseases, are the focus of this review.