Among other functions, the skin serves as the barrier against the environment and provides vital protection from physical or chemical harm and from infection. Skin cells express the aryl hydrocarbon receptor (AHR), a ligand-activated transcription factor and sensor of environmental chemicals; at the same time, AHR ligands are abundant in skin from exogenous or endogenous sources. For example, solar radiation, in particular ultraviolet (UV) B, generates AHR ligands from tryptophan in the skin. Recent evidence has shown that AHR is involved in the (patho)physiology of skin including the regulation of skin pigmentation, photocarcinogenesis, and skin inflammation. We here provide a state-of-the-art summary of work which relates to the role of the AHR in (1) adaptive responses against environmental challenges such as UVB or topical chemicals and (2) intrinsic developmental roles for homeostasis of skin cells and (3) skin immunity. We also discuss the existing evidence that AHR antagonists or AHR ligands may be used for the prevention and/or treatment of skin disease.