Panthenol is the alcohol form of pantothenic acid, otherwise known as vitamin B5. Since this is commonly found in cosmetic products from shampoos to lotions, let's talk about what it's doing there.
Panthenol lubricates and binds to hair follicles, thus coating the hair. It can seal the surface and make the strands appear shiny — this quite often improves the feel of your hair and makes it easier to comb. You may even find it in mascara to do similar things to the hairs of your eyelashes, adding moisture and allowing smoother application.
In lotions and creams, panthenol can improve hydration and reduce itching and inflammation. Since it's easily absorbed and keeps moisture in, it can improve your skin's appearance as well. When the moisture is held under the surface, this can fill out the skin, naturally stretching it and reducing the appearance of fine lines and wrinkles in the process.