Emollient, very thick substance derived from sheep. Lanolin has long been burdened with a reputation for being a sensitizing agent, which has always been a disappointment to formulators because lanolin is such an effective moisturizing ingredient. A study in the British Journal of Dermatology concluded “that lanolin sensitization has remained at a relatively low and constant rate even in a high-risk population.” Based on a review of 24,449 patients who were tested with varying forms of lanolin, it turned out that “The mean annual rate of sensitivity was 1.7%”—and it was lower than that for a 50% concentration of lanolin. It looks like it’s time to restore lanolin’s good reputation. 
That’s a very good thing for someone with dry skin, though it can be a problem for someone with oily skin. Also, as an animal-derived ingredient, lanolin is sometimes viewed as less favorable in comparison to synthetic or plant-derived alternatives.
- Wakelin S, Smith H, White I, Rycroft R, McFadden J. A retrospective analysis of lanolin. Br J Dermatol. 2001;145(1):28-31.