What Is Lanolin in Skin Cream?

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Lanolin is an oily, yellow substance produced by the oil glands in a sheep’s skin. It coats the animal’s wool, helping to keep it dry and healthy. It also softens the skin and acts as an anti-fungal and antibacterial agent. Because of lanolin's protective qualities, it is commonly used in cosmetic creams and lotions designed to smooth and moisturize the skin.

Where It Comes From

Lanolin is extracted from shorn wool, which means that it is a natural, biodegradable substance, as well as a renewable resource. No animals are killed to reap its benefits. According to PBS' Rough Science website, one method of lanolin extraction involves boiling unwashed wool in a solution of water and salt. When the solution has cooled, the lanolin is left floating on its surface. This "impure" lanolin is mixed with olive oil and water, which dissolves any impurities.

Two Types

The term lanolin actually refers to two different substances. The first is lanolin in its refined state, also called lanolin anhydrous. The second is lanolin after it is mixed with water to form an emulsion. According to Lanolin.com, the term as it applies to the pharmaceutical industry most often refers to the oil-and-water emulsion.

Moisture Magic

Lanolin offers the benefit of bi-directional water transportation, says Lanolin.com. This means that it not only attracts moisture, it is also capable of “redistributing [it] to environments of low relative humidity.” Applied topically, lanolin penetrates the skin, where it both hydrates and prevents moisture loss. By correcting the skin’s moisture balance, lanolin creams help to create smoother, softer skin.

Topical Use Only

Lanolin should only be used topically. If ingested, the chemical can cause diarrhea, vomiting, skin irritation and rash. Because lanolin is similar to wax, swallowing too much of the substance may result in intestinal blockages. Although recovery is likely, seek medical assistance as soon as possible if you ingest lanolin. Topically, lanolin skin creams may clog pores.

Other Uses

Lanolin is a common ingredient in skin creams and lotions, as well as other cosmetic products such as lipstick, shampoo and hairspray. The substance also offers a number of industrial applications. It imparts an anti-corrosive effect on metals and is used to protect cars and ships from rusting, says Lanolin.com. It is also used as a lubricant for a variety of technical processes -- for instance, to grease engineering parts -- and as a natural leather protectant.