Alopecia areata (AA) is a relatively common nonscarring hairloss disease characterized by an autoimmune response to anagen hair follicles (HFs). Accumulated evidence suggests that collapse of the HF immune privilege subsequent to triggering events, represented by viral infection, leads to autoimmune response in which autoreactive cytotoxic CD8+NKG2D+ T cells mainly target exposed HF autoantigens. AA had been recognized as type 1 inflammatory disease, but recent investigations have suggested some roles of type 2‐ and Th17‐associated mediators in AA pathogenesis. The significance of psychological stress in AA pathogenesis is less emphasized nowadays, but psychological comorbidities, such as depression and anxiety, attract greater interest in AA management. In this regard, the disease severity may not solely be evaluated by the extent of hair loss. Use of trichoscopy markedly improved the resolution of the diagnosis and evaluation of the phase of AA, which is indispensable for the optimization of treatment. For the standardization of AA management, the establishment of guidelines/expert consensus is pivotal. Indeed, the Japanese Dermatological Association (JDA) and other societies and expert groups have published guidelines/expert consensus reports, which mostly recommend intralesional/topical corticosteroid administration and contact immunotherapy as first‐line treatments, depending on the age, disease severity, and activity of AA. The uniqueness of the JDA guidelines can be found in their descriptions of intravenous corticosteroid pulse therapy, antihistamines, and other miscellaneous domestically conducted treatments. Considering the relatively high incidence of spontaneous regression in mild AA and its intractability in severe subsets, the importance of course observation is also noted. Evidenced‐based medicine for AA is currently limited, however, novel therapeutic approaches, represented by JAK inhibitors, are on their way for clinical application. In this review, the latest understanding of the etiopathogenesis and pathophysiology, and update on therapeutic approaches with future perspectives are summarized for AA, following the current version of the JDA AA management guidelines.