Atopic dermatitis (AD) is one of a family of inflammatory skin diseases (psoriasis, irritant contact dermatitis, and allergic contact dermatitis). Dermal inflammation and production of proinflammatory cytokines by activated T cells is a prominent and defining characteristic in all of these conditions. Corticosteroids, though effective and potent immunosuppressants, are associated with a number of systemic and local adverse effects. The ascomycin derivative pimecrolimus (formerly ASM 981) is a nonsteroid with topical anti-inflammatory activity. Pimecrolimus cream 1% is minimally absorbed into the circulation; thus, it has a low bioavailability-reducing the risk for systemic adverse effects. The efficacy and safety of pimecrolimus cream 1% has been well shown in diverse patient populations with inflammatory skin diseases in several well-controlled trials. Significant and rapid amelioration of the signs and symptoms of AD was established in 3 studies lasting 6 weeks each, evaluating 589 pediatric patients. In a 1-year study, pimecrolimus was applied at the first signs and symptoms of eczema to prevent the progression of AD to flares. Flares were prevented in over 50% of patients who used pimecrolimus cream 1%, reducing or completely eliminating the need for topical corticosteroids during a 1-year treatment period. Results in pimecrolimus studies in chronic irritant hand dermatitis and chronic hand dermatitis of mixed causes indicate potential for use in these important diseases, and further study in these indications is warranted.