Atopic dermatitis (AD) is a genetically predisposed inflammatory and pruritic allergic skin disease with characteristic clinical features. New results on the pathogenesis and therapeutic aspects are discussed in this review. IgE-mediated hypersensitivity may be involved in the largest subset of atopic patients, yet there is another subset for which such involvement cannot be documented. Alterations in epidermal barrier function, priming of cutaneous antigen-presenting cells with IgE, intrinsic keratinocyte defects, and development of autoimmunity are also factors that contribute to the primary disease. Polymorphisms in regions of the genome that are of key importance to the inflammatory response contribute to the patient's clinical picture. Secondary infections, especially with Staphylococcus and yeast organisms, strongly modify or augment the inflammatory response, which changes over time. After the treatment of secondary infections and skin inflammation the avoidance of causal allergens would prevent relapse. Another causative therapy is the variously effective allergen-specific immunotherapy. The newest treatments for canine AD (cyclosporin A and tacrolimus) are highly effective at suppressing the allergic response and comparable to treatment with glucocorticoids. Canine AD presents a substantial diagnostic and therapeutic challenge over a patient's lifetime, and no single treatment is universally effective.