Sjögren-Larsson syndrome (SLS) is an inherited neurocutaneous disorder characterized by ichthyosis, mental retardation, spasticity, and deficient activity of fatty aldehyde dehydrogenase (FALDH). FALDH is an enzyme component of fatty alcohol:NAD oxidoreductase (FAO), which is necessary for fatty alcohol metabolism. To better understand the biochemical basis for the cutaneous symptoms in this disease, we investigated lipid metabolism in cultured keratinocytes from SLS patients. Enzyme activities of FALDH and FAO in SLS cells were <10% of normal. SLS keratinocytes accumulated 45-fold more fatty alcohol (hexadecanol, octadecanol, and octadecenol) than normal, whereas wax esters and 1-O-alkyl-2,3-diacylglycerols were increased by 5.6-fold and 7.5-fold, respectively. SLS keratinocytes showed a reduced incorporation of radioactive octadecanol into fatty acid (24% of normal) and triglyceride (13% of normal), but incorporation into wax esters and 1-O-alkyl-2,3-diacylglycerol was increased by 2.5-fold and 2.8-fold, respectively. Our results indicate that FALDH deficiency in SLS keratinocytes causes the accumulation and diversion of fatty alcohol into alternative biosynthetic pathways. The striking lipid abnormalities in cultured SLS keratinocytes are distinct from those seen in fibroblasts and may be related to the stratum corneum dysfunction and ichthyosis in SLS.