Harlequin Ichthyosis (HI) is a severe skin disease which leads to the neonatal death of ~50% of patients. It is caused by mutations in ABCA12, a transmembrane lipid transporter required to establish the protective skin barrier needed after birth. To better understand the life-threatening newborn HI phenotype we have used mouse models of the disease to profile the development and progression of pathology in utero and in grafted epidermis. Examination of fetal skin uncovered a pro-inflammatory gene expression signature characterised by chemokine up-regulation that is distinct from that seen in other types of ichthyosis, and which persisted in grafted HI skin. By overexpressing the immune suppressor IL-37b in embryonic skin we observed considerable improvements in keratinocyte differentiation, indicating that inflammation drives some aspects of pathogenesis in utero and which might serve as a point for therapeutic intervention. Our examination of skin lipids also showed that ABCA12 plays a central role in regulating cholesterol homeostasis. We have determined that this is due to a functional interaction between ABCA12 and ABCA1, the principal mediator of cellular cholesterol efflux pathways. Consistent with this observation we have demonstrated that specific deletion of ABCA12 in haematopoietic cells results in the accelerated development of atherosclerotic disease. ABCA12 therefore assumes a central role in lipid homeostasis in a number of different tissues and is functionally relevant to the development of several different diseases.