Several small studies have indicated that daily emollient use from birth might delay, suppress or prevent atopic dermatitis (AD). Two larger trials did not confirm this; however, a recent smaller study indicated a protective effect if daily emollient use is used in the first 2 months of life. Further research is needed to evaluate the effect of emollient use on development of AD. The current study randomly assigned 50 newborns who were at high risk of developing AD (1:1) to receive general infant skin-care advice (control group), or skin-care advice plus emollient with advice to apply emollient at least once daily until 1 year of age (intervention group). Repeated skin examinations, skin physiology measurements and skin microbiome profiling were performed. Of the children in the intervention and control groups, 28% and 24%, respectively, developed AD (adjusted Relative Risk (RR) 1.19, p = 0.65, adjusted risk difference 0.05). Skin pH decreased and transepidermal water loss and stratum corneum hydration increased over time in both groups with no significant differences. In the intervention group skin microbiome alpha diversity increased earlier, and the abundance of Streptococcus and Staphylococcus species were significantly reduced at month 1. Daily early emollient use in children with high risk of AD was safe, but it did not significantly reduce the risk of developing AD or impact skin physiology development.