Hydrogels, swellable hydrophilic polymer networks fabricated through chemical cross-linking or physical entanglement are increasingly utilized in various biomedical applications over the past few decades. Hydrogel-based microparticles, dressings and microneedle patches have been explored to achieve safe, sustained and on-demand therapeutic purposes toward numerous skin pathologies, through incorporation of stimuli-responsive moieties and therapeutic agents. More recently, these platforms are expanded to fulfill the diagnostic and monitoring role. Herein, the development of hydrogel technology to achieve diagnosis and monitoring of pathological skin conditions are highlighted, with proteins, nucleic acids, metabolites, and reactive species employed as target biomarkers, among others. The scope of this review includes the characteristics of hydrogel materials, its fabrication procedures, examples of diagnostic studies, as well as discussion pertaining clinical translation of hydrogel systems.