The explosive rise in the incidence of atopic diseases in the Western developed countries can be explained on the basis of the so-called "hygiene hypothesis". In short, it attributes the rising incidence of atopic dermatitis to reduced exposure to various childhood infections and bacterial endotoxins. Reduced exposure to dirt in the clean environment results in a skewed development of the immune system which results in an abnormal allergic response to various environmental allergens which are otherwise innocuous. This article reviews the historical aspects, epidemiological and immunological basis of the hygiene hypothesis and implications for Indian conditions.