Atopic dermatitis (also termed atopic eczema and infantile eczema), a chronic, itchy, inflammatory skin disease that sets on at infancy or early childhood, is observed with increasing prevalence around the world, particularly in developed nations. Although sufficient evidences are not yet available to define it as a classical autoimmune disease, autoantigens have been identified. Investigations of atopic dermatitis in human patients and animal models suggest that this disease is initiated, maintained and perpetuated by the actions of cytokines, chemokines, T cells, antigen-presenting cells and other inflammatory cells; there is also evidence of skin barrier defect and angiogenesis. Recent identification of mutations of the epidermal barrier protein filaggrin (encoded by FLG), present in about 9% of people of European origin, with 70% of individuals homozygous or compound heterozygous for FLG null alleles developing atopic dermatitis, provides a strong link between a defect of the epidermal barrier that allows easy penetration of pathogen/allergen through the skin and a systemic hyperactive immune response to the penetrated pathogen/allergen. The newly introduced concept of 'intrinsic' and 'extrinsic' atopic dermatitis has fueled the debate among academic dermatologists as to how 'atopic' atopic dermatitis should be defined. Some recent advancements on the management options for atopic dermatitis are also discussed.