Prior studies have established the requirement for enzymatic hydrolysis of glucosylceramides to ceramide for epidermal barrier homeostasis. In this study, we asked whether sphingomyelin-derived ceramide, resulting from acid-sphingomyelinase activity, is also required for normal barrier function. We showed first, that a subset of Niemann–Pick patients with severe acid-sphingomyelinase deficiency (i.e., <2% residual activity) demonstrate abnormal permeability barrier homeostasis, i.e., delayed recovery kinetics following acute barrier disruption by cellophane tape-stripping. To obtain further mechanistic insights into the potential requirement for sphingomyelin-to-ceramide processing for the barrier, we next studied the role of acid-sphingomyelinase in hairless mouse skin. Murine epidermis contains abundant acid-sphingomyelinase activity (optimal pH 5.1–5.6). Two hours following acute barrier disruption by tape-stripping, acid-sphingomyelinase activity increases 1.44-fold (p<0.008 versus vehicle-treated controls), an increase that is blocked by a single topical application of the acid-sphingomyelinase inhibitor, palmitoyldihydrosphingosine. Furthermore, both palmitoyldihydrosphingosine and desipramine, a chemically and mechanically unrelated acid-sphingomyelinase inhibitor, significantly delay barrier recovery both 2 and 4 h after acute barrier abrogation. Inhibitor application also causes both an increase in sphingomyelin content, and a reduction of normal extracellular lamellar membrane structures, in the stratum corneum. Both of the inhibitor-induced delays in barrier recovery can be overridden by co-applications of topical ceramide, demonstrating that an alteration of the ceramide–sphingomyelin ratio, rather than sphingomyelin accumulation, is likely responsible for the barrier abnormalities that occur with acid-sphingomyelinase deficiency. These studies demonstrate an important role for enzymatic processing of sphingomyelin-to-ceramide by acid-sphingomyelinase as a mechanism for generating a portion of the stratum corneum ceramides for permeability barrier homeostasis in mammalian skin.