The outermost layer of skin, stratum corneum (SC), functions as the major barrier to diffusion. SC has the architecture of dead keratin filled cells embedded in a lipid matrix. This work presents a detailed study of the hydration process in extracted SC lipids, isolated corneocytes and intact SC. Using isothermal sorption microcalorimetry and relaxation and wideline 1H NMR, we study these systems at varying degrees of hydration/relative humidities (RH) at 25 °C. The basic findings are (i) there is a substantial swelling both of SC lipids, the corneocytes and the intact SC at high RH. At low RHs corneocytes take up more water than SC lipids do, while at high RHs swelling of SC lipids is more pronounced than that of corneocytes. (ii) Lipids in a fluid state are present in both extracted SC lipids and in the intact SC. (iii) The fraction of fluid lipids is lower at 1.4% water content than at 15% but remains virtually constant as the water content is further increased. (iv) Three exothermic phase transitions are detected in the SC lipids at RH = 91–94%, and we speculate that the lipid re-organization is responsible for the hydration-induced variations in SC permeability. (v) The hydration causes swelling in the corneocytes, while it does not affect the mobility of solid components (keratin filaments).