Abstract: Although neonatal and adult epidermis are similar with respect to thickness and lipid composition, skin development is not complete at birth. Previous studies indicate that the skin undergoes a process of adaptation and maturation postnatally. Postnatal skin physiology has not yet been evaluated comprehensively in a prospective study. We assessed skin function parameters prospectively in a cohort of 202 healthy term neonates (98 boys) of Caucasian descent. Measurements were performed at 3 days, 4 weeks, and 12 weeks of age and at four different body sites (frontal area, cheek, volar forearm, and gluteal surface). The following parameters were assessed: skin surface pH, corneal layer hydration (capacitance), epidermal desquamation, and surface roughness. Data were presented in box and whisker plots. Our results were as follows. Surface pH decreased by 0.3–1.1 units (p < 0.001), while desquamation increased significantly during the observation period (p < 0.001), but only on the facial areas. There was a significant increase in stratum corneum hydration (p < 0.001) which was paralleled by decreasing skin roughness, indicating smoothing of the skin surface (p < 0.001). No significant differences were found between male and female infants. These findings reflect significant cutaneous adaptation processes, particularly during the neonatal period. Reference values for functional skin parameters may be helpful in delineating normal from pathologic skin conditions such as ichthyosis or atopic dermatitis at an early stage when intervention might help to prevent exacerbations. The usefulness of these reference values will have to be evaluated in clinical practice.