Contact allergy is caused by a wide range of chemicals after skin contact. Its clinical manifestation, allergic contact dermatitis (ACD), is developed upon repeated contact with the allergen. This perspective focuses on two areas that have yielded new useful information during the last 20 years: (i) structure-activity relationship (SAR) studies of contact allergy based on the concept of hapten-protein binding and (ii) mechanistic investigations regarding activation of nonsensitizing compounds to contact allergens by air oxidation or skin metabolism. The second area is more thoroughly reviewed since the full picture has previously not been published. Prediction of the sensitizing capacity of a chemical is important to avoid outbreaks of ACD in the population. Much research has been devoted to the development of in vitro and in silico predictive testing methods. Today, no method exists that is sensitive enough to detect weak allergens and that is robust enough to be used for routine screening. To cause sensitization, a chemical must bind to macromolecules (proteins) in the skin. Expert systems containing information about the relationship between the chemical structure and the ability of chemicals to haptenate proteins are available. However, few designed SAR studies based on mechanistic investigations of prohaptens have been published. Many compounds are not allergenic themselves but are activated in the skin (e.g., metabolically) or before skin contact (e.g., via air oxidation) to form skin sensitizers. Thus, more basic research is needed on the chemical reactions involved in the antigen formation and the immunological mechanisms. The clinical importance of air oxidation to activate nonallergenic compounds has been demonstrated. Oxidized fragrance terpenes, in contrast to the pure terpenes, gave positive patch test reactions in consecutive dermatitis patients as frequently as the most common standard allergens. This shows the importance of using compounds to which people are exposed when screening for ACD in dermatology clinics.