Barrier activity of skin and internal barrier-forming epithelial linings are conferred by a lipid-corneocyte structure (stratum corneum in skin). The integrity of the corneocytes depends on the outer cornified envelope and is essential for maintenance of barrier function. During epidermal development and differentiation, proteins are sequentially incorporated into the envelope via action of epidermal transglutaminases in a well documented process. However, recent knockouts of major cornified envelope constituents have failed to disrupt barrier function significantly, suggesting that additional unidentified components are involved. We report a new gene cluster in the epidermal differentiation complex at human 1q21 encoding a family of 18 proteins that are substrates for epidermal transglutaminases. These proteins incorporate into the cornified envelope late in development and late in the process of envelope maturation during epidermal differentiation. The genes cluster within the epidermal differentiation complex according to expression pattern, i.e., epidermally expressed proteins cluster together while proteins from internal barrier-forming epithelia also cluster. We propose that these proteins modulate barrier activity over the surface of the animal, in a manner analogous to that proposed for the well characterized cornified envelope precursors, the small proline-rich proteins. To emphasize the incorporation of these proteins late in envelope assembly, we call the human proteins late envelope proteins.