Prurigo nodularis is a chronic skin condition which has significant negative impacts on the psychosocial function and quality of life of affected patients. It is a heterogeneous disease with complex underlying pathogenic mechanisms, and the clinical efficacy of traditional treatment options is often limited. Recently, great advances have been made in the pathogenesis of prurigo nodularis, which have enabled the development of novel targeted therapies for this disease. Various clinical trials have investigated the therapeutic efficacy of biologics which target the Th2 pathway. Dupilumab, a monoclonal antibody targeting interleukin 4 (IL-4) receptor α, has shown clinical efficacy and obtained United States Food and Drug Administration approval for prurigo nodularis. In addition, nemolizumab (IL-31 receptor A antagonist) and vixarelimab (oncostatin M receptor β antagonist) have shown therapeutic efficacy in clinical trials for prurigo nodularis. Small-molecule inhibitors with clinical promise which are currently under investigation include nalbuphine (opioid receptor modulator), Janus kinase inhibitors, and aprepitant and serlopitant (neurokinin-1 receptor antagonists). The recent development of new biologics and small-molecule inhibitors targeting various immunological and neurological signaling pathways have provided great hope that we are entering a new era of targeted therapies for this challenging clinical condition. In addition, recent advances in RNA sequencing technology may enable the identification of unique signaling pathways and the development of novel treatments for this disease in the future. In this review article, we summarize the current knowledge of the pathogenesis of prurigo nodularis, and discuss recent advances in treatment for this challenging clinical condition.