Atopic dermatitis (AD) is a chronic inflammatory disease hypothesized to be the product of complex interactions among the host's environment, susceptibility genes, skin barrier dysfunction, and immune system dysregulation. The objective of this article is to describe the pathobiology and treatment of AD, with particular focus on the role of immune system dysregulation and therapies designed to target this. Literature review indicates that there are immunologic differences between the lesional and non-lesional skin of atopic individuals, and that the non-lesional skin of atopic individuals presents an immunologic profile distinct from that of the skin of healthy individuals. Thus, immune system dysregulation is postulated to be a key contributing factor to the complex etiology of AD. Immunomodulatory agents such as topical corticosteroids (TCSs) and topical calcineurin inhibitors (TCIs), which address the underlying immunopathology of AD, are the foundation for the pharmacologic treatment of flares. TCSs and TCIs both target the inflammatory response responsible for an AD flare but via two distinct mechanisms of action. Whereas TCSs have a more widespread impact on the immune system, the action of TCIs is targeted to the calcineurin pathway and inhibition of T-cell activation. Together, TCSs and TCIs represent the backbone of a long-term treatment strategy for AD.