The mammalian epoxide hydrolase (EPHX)3 is known from in vitro experiments to efficiently hydrolyze the linoleate epoxides 9,10-epoxyoctadecamonoenoic acid (EpOME) and epoxyalcohol 9R,10R-trans-epoxy-11E-13R-hydroxy-octadecenoate to corresponding diols and triols, respectively. Herein we examined the physiological relevance of EPHX3 to hydrolysis of both substrates in vivo. Ephx3−/− mice show no deficiency in EpOME-derived plasma diols, discounting a role for EPHX3 in their formation, whereas epoxyalcohol-derived triols esterified in acylceramides of the epidermal 12R-lipoxygenase pathway are reduced. Although the Ephx3−/− pups appear normal, measurements of transepidermal water loss detected a modest and statistically significant increase compared with the wild-type or heterozygote mice, reflecting a skin barrier impairment that was not evident in the knockouts of mouse microsomal (EPHX1/microsomal epoxide hydrolase) or soluble (EPHX2/sEH). This barrier phenotype in the Ephx3−/− pups was associated with a significant decrease in the covalently bound ceramides in the epidermis (40% reduction, p < 0.05), indicating a corresponding structural impairment in the integrity of the water barrier. Quantitative LC-MS analysis of the esterified linoleate-derived triols in the murine epidermis revealed a marked and isomer-specific reduction (∼85%) in the Ephx3−/− epidermis of the major trihydroxy isomer 9R,10S,13R-trihydroxy-11E-octadecenoate. We conclude that EPHX3 (and not EPHX1 or EPHX2) catalyzes hydrolysis of the 12R-LOX/eLOX3-derived epoxyalcohol esterified in acylceramide and may function to control flux through the alternative and crucial route of metabolism via the dehydrogenation pathway of SDR9C7. Importantly, our findings also identify a functional role for EPHX3 in transformation of a naturally esterified epoxide substrate, pointing to its potential contribution in other tissues.