The sebaceous glands arise as epidermal buds from the sides of the developing epithelial root sheath of hair follicles during the 5th month of fetal life. The buds grow into the surrounding mesenchyme where their ends become branched to form the primordia of glandular alveoli and their associated ducts. The central cells of each alveolus undergo fatty degeneration and break down to form an oily secretion called sebum. The cells in the basal layer of each alveolus consist of proliferating stem cells that maintain the supply of new cells throughout life. The newly produced cells are forced into the lumen to undergo fatty degeneration and disintegration, resulting in holocrine type of secretion.
The sebum is extruded into the hair follicle and passes to the surface of skin where it lubricates the hair and skin. During the fetal life the sebum becomes mixed with the cast off peri-dermal cells lo form the vernix caseosa.