Background Stratum corneum lipids, particularly ceramides, are important components of the epidermal permeability barrier that are decreased in atopic dermatitis and aged skin. Objectives We investigated the effects of nicotinamide, one of the B vitamins, on biosynthesis of sphingolipids, including ceramides and other stratum corneum lipids, in cultured normal human keratinocytes, and on the epidermal permeability barrier in vivo. Methods The rate of sphingolipid biosynthesis was measured by the incorporation of [14C]-serine into sphingolipids. Results When the cells were incubated with 1–30 μmol L−1 nicotinamide for 6 days, the rate of ceramide biosynthesis was increased dose-dependently by 4·1–5·5-fold on the sixth day compared with control. Nicotinamide also increased the synthesis of glucosylceramide (7·4-fold) and sphingomyelin (3·1-fold) in the same concentration range effective for ceramide synthesis. Furthermore, the activity of serine palmitoyltransferase (SPT), the rate-limiting enzyme in sphingolipid synthesis, was increased in nicotinamide-treated cells. Nicotinamide increased the levels of human LCB1 and LCB2 mRNA, both of which encode subunits of SPT. This suggested that the increase in SPT activity was due to an increase in SPT mRNA. Nicotinamide increased not only ceramide synthesis but also free fatty acid (2·3-fold) and cholesterol synthesis (1·5-fold). Topical application of nicotinamide increased ceramide and free fatty acid levels in the stratum corneum, and decreased transepidermal water loss in dry skin. Conclusions Nicotinamide improved the permeability barrier by stimulating de novo synthesis of ceramides, with upregulation of SPT and other intercellular lipids.