Atopic dermatitis is a chronic, relapsing form of eczema characterized by scaling, itchy, inflamed skin that can be triggered by an interplay of genetic, immunologic, and environmental factors. Immune dysregulation appears to play an important role in the cause of atopic dermatitis. Topical corticosteroid agents have been the mainstay of therapy for atopic dermatitis because of their broad immunomodulatory effects. However, topical corticosteroid agents are not ideal agents because when used over the long term, they may cause cutaneous atrophy and immunosuppression. Systemic corticosteroidal agents, certain antihistiminic agents, systemic cyclosporin, and phototherapy have proven value in treating patients with atopic dermatitis. In the search for a noncorticosteroidal topical agent, tacrolimus stands out as being uniquely suited for this condition. Tacrolimus affects a broad spectrum of inflammatory mediators and processes known to be relevant to atopic dermatitis pathogenesis. Tacrolimus demonstrates good percutaneous penetration and appears to have no potential to cause cutaneous atrophy. There are multiple double-blind, controlled studies demonstrating the safety and efficacy of this agent in treating atopic dermatitis. The agent may be of particular benefit in children, among whom an alternative to the chronic use of corticosteroid agents, either topically or systemically, is highly desirable.