Mutations in patatin-like phospholipase domain-containing 1 (PNPLA1) cause autosomal recessive congenital ichthyosis, but the mechanism involved remains unclear. Here we show that PNPLA1, an enzyme expressed in differentiated keratinocytes, plays a crucial role in the biosynthesis of ω-O-acylceramide, a lipid component essential for skin barrier. Global or keratinocyte-specific Pnpla1-deficient neonates die due to epidermal permeability barrier defects with severe transepidermal water loss, decreased intercellular lipid lamellae in the stratum corneum, and aberrant keratinocyte differentiation. In Pnpla1 epidermis, unique linoleate-containing lipids including acylceramides, acylglucosylceramides and (O-acyl)-ω-hydroxy fatty acids are almost absent with reciprocal increases in their putative precursors, indicating that PNPLA1 catalyses the ω-O-esterification with linoleic acid to form acylceramides. Moreover, acylceramide supplementation partially rescues the altered differentiation of Pnpla1 keratinocytes. Our findings provide valuable insight into the skin barrier formation and ichthyosis development, and may contribute to novel therapeutic strategies for treatment of epidermal barrier defects.