Skin lies at the interface between the complex physiology of the body and the external environment. This essential epidermal barrier, composed of cornified proteins encased in lipids, prevents both water loss and entry of infectious or toxic substances. We uncover that the transcription factor GATA-3 is required to establish the epidermal barrier and survive in the ex utero environment. Analysis of Gata-3 mutant transcriptional profiles at three critical developmental stages identifies a specific defect in lipid biosynthesis and a delay in differentiation. Genomic analysis identifies highly conserved GATA-3 binding sites bound in vivo by GATA-3 in the first intron of the lipid acyltransferase gene AGPAT5. Skin from both Gata-3-/- and previously characterized barrier-deficient Kruppel-like factor 4-/- newborns up-regulate antimicrobial peptides, effectors of innate immunity. Comparison of these animal models illustrates how impairment of the skin barrier by two genetically distinct mechanisms leads to innate immune responses, as observed in the common human skin disorders psoriasis and atopic dermatitis.