Forming the crucial interface between the plant and the outside world, the outer epidermal cell layer derives from a meristem called the protoderm. While protoderm differentiation is known to be driven by the autoregulatory transcription factors ATML1 and PDF2, the positional signals that restrict epidermal differentiation to the outermost position are still poorly understood. Now, Kenji Nagata, Mitsutomo Abe and colleagues reveal a new role for VLCFA-Cers, derivatives of very-long-chain fatty acids that are secreted as surface lipids to form the epidermal cuticle, in protoderm/epidermis differentiation. The authors first find that ATML1 and PDF2 are expressed in the outermost cells of the root and are redundantly required for lateral root formation. When ATML1-EGFP is expressed ubiquitously, it is only retained in the nuclei of outermost root cells, and where the lipid-binding capacity of ATML1 is lost (via an engineered W471L residue change), expression is lost even in the outermost cells. The interaction between ATML1 and VLCFA-Cers is attenuated in the W471L mutant, and treatment with an inhibitor of VLCFA-Cer biosynthesis leads to loss of ATML1-EGFP in outermost cells. PAS2, an essential VLCFA-Cer biosynthesis enzyme, is expressed in outermost cells. Finally, the authors uncover that the VLCFA-Cers are involved in compartmentation of the outer lateral membrane. Thus, VLCFA-Cer lipids are crucial regulators of protoderm/epidermis differentiation.