Ceteth-20 is part of a group of ingredients known as ceteths. These are synthetic compounds that are synthesized through a process known as ethoxylation, a chemical reaction in which ethylene oxide is added to a substrate. In regards to the ceteth ingredients, the substrate is cetyl alcohol, a fatty alcohol that is obtained from palm oil. The number associated with the ceteth (i.e. ceteth-20) indicates the average number of repeating ethylene oxide units in the molecule.

In cosmetics and personal care products, ceteth-20 functions as a surfactant and emulsifier. A surfactant molecule contains one end that is hydrophilic (attracted to water) and one end that is lipophilic (attracted to oil). This allows surfactants to attract and suspends oils, dirt, and other impurities that have accumulated on the skin and wash them away. Due to these properties, ceteth-20 is often used in cleansers, body washes, and shampoos. Ceteth-20 can also be used as an emulsifier in products that contain both water and oil components. With an HLB value of 15.7, ceteth-20 is soluble in water and gives rise to oil-in-water emulsions.