Significance: Terahertz (THz) radiation has demonstrated a great potential in biomedical applications over the past three decades, mainly due to its non-invasive and label-free nature. Among all biological specimens, skin tissue is an optimal sample for the application of THz-based methods because it allows for overcoming some intrinsic limitations of the technique, such as a small penetration depth (0.1 to 0.3 mm for the skin, on average). Aim: We summarize the modern research results achieved when THz technology was applied to the skin, considering applications in both imaging/detection and treatment/modulation of the skin constituents. Approach: We perform a review of literature and analyze the recent research achievements in THz applications for skin diagnosis and investigation. Results: The reviewed results demonstrate the possibilities of THz spectroscopy and imaging, both pulsed and continuous, for diagnosis of skin melanoma and non-melanoma cancer, dysplasia, scars, and diabetic condition, mainly based on the analysis of THz optical properties. The possibility of modulating cell activity and treatment of various diseases by THz-wave exposure is shown as well. Conclusions: The rapid development of THz technologies and the obtained research results for skin tissue highlight the potential of THz waves as a research and therapeutic instrument. The perspectives on the use of THz radiation are related to both non-invasive diagnostics and stimulation and control of different processes in a living skin tissue for regeneration and cancer treatment.