The skin is a complex and dynamic ecosystem, wherein epithelial cells, immune cells and the skin microbiota actively interact and maintain barrier integrity and functional immunity. Skin microbes actively tune the functions of the resident immune cells. Dysbiosis – alterations in the resident microbiota – leads to the dysregulation of host immunity. Microbiome analyses in humans and dogs with atopic dermatitis (AD) have shown shifts in microbial diversity, and in particular, an increased proportion of staphylococci. Monogenic diseases that manifest AD‐like symptoms provide insights into the pathogenesis of AD and the mechanisms of dysbiosis, from both the epithelial and immunological perspectives. The symbiotic relationships between the host and microbiota must be maintained constitutively. Detailed mechanisms of how host immunity regulates commensal bacteria in the steady state have been reported. The skin harbours multiple tissue‐resident immune cells, including both innate and adaptive immune cells. Recent studies have highlighted the fundamental role of innate lymphoid cells (ILCs) in the maintenance of barrier functions and tissue homeostasis. ILCs directly respond to tissue‐derived signals and are instrumental in barrier immunity. Epithelial cells produce alarmins such as thymic stromal lymphopoietin (TSLP) and interleukins (IL)‐33 and IL‐25, all of which activate group 2 ILCs (ILC2s), which produce type 2 cytokines, such as IL‐5 and IL‐13, boosting type 2 immune reactions. Dysregulation of the epithelial–ILC crosstalk results in allergic inflammation. This review highlights our understanding of the active interactions between the host epithelial and immune cells, and microbiota, providing a foundation for novel therapeutic strategies for inflammatory skin diseases.