Telogen effluvium (TE) is one of the most common causes of diffuse nonscarring hair loss. In its acute form, it generates a lot of anxiety in the patient, which can be significantly allayed with a confident diagnosis. In its more chronic form, however, the hair loss may go unnoticed for long periods of time. Here in, the dermatologist's role in differentiating it from the more common patterned hair loss is significant. Differentiating TE from other causes of diffuse nonscarring hair loss can indeed be a daunting task and TE is often used as a waste basket diagnosis. A number of factors have been implicated in the causation of TE, however, clear evidence in their support is lacking. The role of stress as a causative factor as well as the result of hair loss needs to be adequately understood. This review aims at summarizing our current level of knowledge with respect to this very common cause of hair loss. An attempt is made to help the readers reliably differentiate TE from other causes of diffuse nonscarring hair loss. The possible causative factors, pathogenetic mechanisms, clinical presentation, and possible treatment options are discussed.