Atopic dermatitis is a chronic inflammatory skin disease that is frequently associated with respiratory allergies. Atopic dermatitis develops as a result of a complex interrelationship of environmental, immunologic, genetic, and pharmacologic factors. Efforts to understand the relative contributions of these factors have led to research seeking to identify the relevant effector cells and mediators involved in the pathogenesis of atopic dermatitis. These factors include the pattern of local cytokine release, the differentiation of helper T cells, multiple roles of IgE, skin-directed cell responses, infectious agents, and superantigens. This article reviews these cellular and immunologic mechanisms underlying atopic dermatitis and discusses how an understanding of their role in the inflammatory process may lead to improved treatments for atopic dermatitis.