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Background: Skin barrier dysfunction may precede infantile development of clinical atopic dermatitis (AD). Early‐life emollient therapy to enhance barrier function may prevent or modify AD development in high‐risk infants. Objectives: (a) To determine whether daily full‐body application of an emollient with ceramide and amino acids (study emollient) can reduce the cumulative AD incidence compared to standard skin care at 1 year of age. (b) To evaluate the study emollient's effect on skin barrier function, natural moisturizing factor and the microbiome using non‐invasive biophysical and biochemical techniques. Methods: We performed a single‐centre, investigator‐blinded, randomized controlled trial enrolling infants at high risk for AD development determined by family history. The intervention was full‐body once‐daily application of the study emollient. The control arm was asked to not apply full‐body emollient regularly and only use an emollient of their choice for dry skin. The primary outcome was the cumulative incidence of AD diagnosed at 12 months by a blinded investigator. Results: Less than half the target sample size was enrolled (n = 100, goal sample was 208) with 28% lost to follow‐up. Across all clinical end points, a numerical trend was observed in favour of the intervention, although not statistically significant likely due to lack of power from under‐enrolment. AD was diagnosed in 13.2% vs. 25.0% at 12 months (P = 0.204) and 19.4% vs. 31.0% at 2 years (P = 0.296) in intervention vs. control groups, respectively. There were no significant differences between groups in skin barrier or microbiome assessments. While there were no serious adverse events, there were more cases of reported contact dermatitis in the intervention vs. control arms, 9.3% vs. 4.3%, respectively; however, these events were not related to the study emollient and most mild in severity. Conclusion: The observed trends suggest a protective effect of daily study emollient therapy compared to control. [ABSTRACT FROM AUTHOR]