Sulfur mustard (SM), a chemical weapon first employed during World War I, targets the skin, eyes, and lung. It remains a significant military and civilian threat. The characteristic response of human skin to SM involves erythema of delayed onset, followed by edema with inflammatory cell infiltration, the appearance of large blisters in the affected area, and a prolonged healing period. Several in vivo and in vitro models have been established to understand the pathology and investigate the mechanism of action of this vesicating agent in the skin. SM is a bifunctional alkylating agent which reacts with many targets including lipids, proteins, and DNA, forming both intra- and intermolecular cross-links. Despite the relatively nonselective chemical reactivity of this agent, basal keratinocytes are more sensitive, and blistering involves detachment of these cells from their basement membrane adherence zones. The sequence and manner in which these cells die and detach is still unresolved. Much has been discovered over the past two decades with respect to the mechanisms of SM-induced cytotoxicity and the intracellular and extracellular targets of this vesicant. In this review, the effects of SM exposure on the skin are described, as well as potential mechanisms mediating its actions. Successful therapy for SM poisoning will depend on following new mechanistic leads to develop drugs that target one or more of its sites of action.