Naturally occurring triterpenoids such as oleanolic acid (OA) and ursolic acid (UA) are known to have anti-inflammatory and anticarcinogenic activities in some types of cells. Although it has been reported that UA increases the amount of ceramide in keratinocytes, there is little study on the mechanism of triterpenoids involved in the differentiation of keratinocytes as well as their effects on epidermal permeability barrier. A study was therefore conducted to determine whether OA and UA could stimulate the differentiation of epidermal keratinocytes through peroxisome proliferator-activated receptor (PPAR)-alpha activation. This work was then extended to investigate the rate of formation of cornified envelope as a marker in the terminal differentiation of keratinocytes and the amount of transglutaminase in human keratinocytes treated with OA and UA. It was shown that OA induced the differentiation of keratinocytes, whereas UA had little effect. In addition, reporter gene assay using PPAR response element activity demonstrated that OA might be related to the increase of PPAR-alpha activity in CV-1 cells. Moreover, it enhanced the recovery of epidermal permeability barrier function as well as increased ceramides in epidermis after topical application. We therefore propose that the effect of OA on the stimulation of differentiation in epidermal keratinocytes seems to be highly related to activation of PPAR-alpha.