Since ceramide is a key epidermal barrier constituent and its deficiency causes barrier-compromised skin, several molecular types of ceramides are formulated in commercial topical agents to improve barrier function. Topical ceramide localizes on the skin surface and in the stratum corneum, but certain amounts of ceramide penetrate the stratum granulosum, becoming precursors to endogenous ceramide synthesis following molecular modification. Moreover, exogenous ceramide as a lipid mediator could modulate keratinocyte proliferation/differentiation. We here investigated the biological roles of exogenous NP (non-hydroxy ceramide containing 4-hydroxy dihydrosphingosine) and NDS (non-hydroxy ceramide containing dihydrosphingosine), both widely used as topical ceramide agents, in differentiated-cultured human keratinocytes. NDS, but not NP, becomes a precursor for diverse ceramide species that are required for a vital permeability barrier. Loricrin (late differentiation marker) production is increased in keratinocytes treated with both NDS and NP vs. control, while bigger increases in involucrin (an early differentiation marker) synthesis were observed in keratinocytes treated with NDS vs. NP and control. NDS increases levels of a key antimicrobial peptide (an innate immune component), cathelicidin antimicrobial peptide (CAMP/LL-37), that is upregulated by a ceramide metabolite, sphingosine-1-phosphate. Our studies demonstrate that NDS could be a multi-potent ceramide species, forming heterogenous ceramide molecules and a lipid mediator to enhance differentiation and innate immunity.