Apolipoprotein E deficiency leads to familial dysbetalipoproteinemia characterized by Increases in serum lipid levels, atherosclerosis, and cutaneous xanthoma. Apolipoprotein E is synthesized in many tissues in the body, including the epidermis. In the present study, we determined whether transgenic mice deficient in apolipoprotein E develop cutaneous xanthoma and the effect of dietary fat intake on these lesions. We also determined whether apolipoprotein E-deficient mice have abnormalities in cutaneous barrier function or stratum corneum structure, Homozygous apolipoprotein E-deficient mice (-/-) fed a high-fat diet displayed a diffuse inflammatory infiltrate in the dermis surrounding fat droplets in macrophages. In homozygous mice (-/-) fed a low-fat diet, similar lesions were seen but they tended to be focal and less prominent. In heterozygous mice (+/-) fed the high-fat diet, a few inflammatory cells were present in the dermis but foam cells were not seen. Control mice (+/+) fed a high-fat diet displayed scattered inflammatory cells in the dermis, Heterozygous mice (+/-) fed a low-fat diet were similar to control mice (+/+) fed a low-fat diet. The extent of foam cell formation correlated directly with the degree of atherosclerosis, There were no abnormalities in permeability-barrier function or stratum corneum structure in apolipoprotein E-deficient mice. Thus, the lack of apolipoprotein E production in the epidermis does not appear to lead to any detectable abnormality in structure or function of the stratum corneum. However, lack of apolipoprotein E leads to cutaneous foam cell formation, presumably secondary to disturbances in lipoprotein metabolism.