Abstract Lanolin, which is extensively used in pharmaceuticals and cosmetics, is generally considered to consist of a mixture of naturally formed esters derived from higher alcohols and higher fatty acids. This paper encompasses the chemical description of lanolin; the composition of its esters, acids, and alcohols; the chemical and physical modifications of lanolin; the refining of lanolin; and some of its applications in pharmaceutical and cosmetic formulations. Some new developments in lanolin chemistry will also be high‐lighted.