Harlequin ichthyosis (HI) is caused by loss-of-function mutations in the keratinocyte lipid transporter ABCA12. The patients often die in the first 1 or 2 weeks of life, although HI survivors’ phenotypes improve within several weeks after birth. In order to clarify the mechanisms of phenotypic recovery, we studied grafted skin and keratinocytes from Abca12-disrupted (Abca12^−/−) mice showing abnormal lipid transport. Abca12^−/− neonatal epidermis showed significantly reduced total ceramide amounts and aberrant ceramide composition. Immunofluorescence and immunoblotting of Abca12^−/− neonatal epidermis revealed defective profilaggrin/filaggrin conversion and reduced protein expression of the differentiation-specific molecules, loricrin, kallikrein 5, and transglutaminase 1, although their mRNA expression was up-regulated. In contrast, Abca12^−/− skin grafts kept in a dry environment exhibited dramatic improvements in all these abnormalities. Increased transepidermal water loss, a parameter representing barrier defect, was remarkably decreased in grafted Abca12^−/− skin. Ten-passage sub-cultured Abca12^−/− keratinocytes showed restoration of intact ceramide distribution, differentiation-specific protein expression and profilaggrin/filaggrin conversion, which were defective in primary-cultures. Using cDNA microarray analysis, lipid transporters including four ATP-binding cassette transporters were up-regulated after sub-culture of Abca12^−/− keratinocytes compared with primary-culture. These results indicate that disrupted keratinocyte differentiation during the fetal development is involved in the pathomechanism of HI and, during maturation, Abca12^−/− epidermal keratinocytes regain normal differentiation processes. This restoration may account for the skin phenotype improvement observed in HI survivors.