< i>Transglutaminase 1 (TGase 1) is one of the genes implicated in autosomal recessive congenital ichthyosis. Skin from TGase 1^–/– mice, which die as neonates, lacks the normal insoluble cornified envelope and has impaired barrier function. Characterization of in situ dye permeability and transepidermal water loss revealed defects in the development of the skin permeability barrier in TGase 1^–/– mice. In the stratum corneum of the skin, tongue, and forestomach, intercellular lipid lamellae were disorganized, and the corneocyte lipid envelope and cornified envelope were lacking. Neonatal TGase 1^–/– mouse skin was taut and erythrodermic, but transplanted TGase 1^–/– mouse skin resembled that seen in severe ichthyosis, with epidermal hyperplasia and marked hyperkeratosis. Abnormalities in those barrier structures remained, but transepidermal water loss was improved to control levels in the ichthyosiform skin. From these results, we conclude that TGase 1 is essential to the assembly and organization of the barrier structures in stratified squamous epithelia. We suggest that the ichthyosiform skin phenotype in TGase 1 deficiency develops the massive hyperkeratosis as a physical compensation for the defective cutaneous permeability barrier required for survival in a terrestrial environment.