Lamellar ichthyosis (LI) is a disfiguring skin disease characterized by abnormal epidermal differentiation and defective cutaneous barrier function^1,2. LI has been associated with loss of keratinocyte transglutaminase 1 (Tgase1)^3,4, an enzyme believed necessary for normal formation of the cornified epidermal barrier. Using LI as a prototype for therapeutic cutaneous gene delivery, we have used the human skin/immunodeficient mouse xenograft model to correct the molecular, histologic and functional abnormalities of LI patient skin in vivo. We have used Tgase1–deficient primary keratinocytes from LI patients combined with high–efficiency transfer of functional Tgase1 to regenerate engineered human LI epidermis on immunodeficient mice. Engineered LI epidermis displayed normal Tgase1 expression in vivo, unlike unengineered LI epidermis where Tgase1 was absent. Epidermal architecture was also normalized by Tgase1 restoration, as was expression of the epidermal differentiation marker filaggrin. Engineered LI skin demonstrated restoration of cutaneous barrier function measures to levels seen in epidermis regenerated by keratinocytes from patients with normal skin, indicating functional correction in vivo of the proposed primary pathophysiologic defect in LI. These results confirm a major role for Tgase1 in epidermal differentiation and demonstrate a potential future approach to therapeutic gene delivery in human skin.