The human epidermis serves 2 crucial barrier functions: it protects against water loss and prevents penetration of infectious agents and allergens. The physiology of the epidermis is maintained by a balance of protease and antiprotease activities, as illustrated by the rare genetic skin disease Netherton syndrome (NS), in which impaired inhibition of serine proteases causes severe skin erythema and scaling. Here, utilizing mass spectrometry, we have identified elastase 2 (ELA2), which we believe to be a new epidermal protease that is specifically expressed in the most differentiated layer of living human and mouse epidermis. ELA2 localized to keratohyalin granules, where it was found to directly participate in (pro-)filaggrin processing. Consistent with the observation that ELA2 was hyperactive in skin from NS patients, transgenic mice overexpressing ELA2 in the granular layer of the epidermis displayed abnormal (pro-)filaggrin processing and impaired lipid lamellae structure, which are both observed in NS patients. These anomalies led to dehydration, implicating ELA2 in the skin barrier defect seen in NS patients. Thus, our work identifies ELA2 as a major new epidermal protease involved in essential pathways for skin barrier function. These results highlight the importance of the control of epidermal protease activity in skin homeostasis and designate ELA2 as a major protease driving the pathogenesis of NS.