Although the complete picture for alopecia areata (AA) pathogenesis has yet to be determined, recent research has made much progress in our understanding of the disease mechanism. Numerous circumstantial evidence supports the notion that AA is fundamentally a disease mediated by inflammatory cells and may be autoimmune in nature. Recent research has shown the hair-loss phenotype is precipitated predominantly by CD8+ lymphocytes, but the disease mechanism is driven by CD4+ lymphocytes. Although genetic susceptibility is a key contributor to disease development, disease onset and phenotypic presentation are probably modified by complex environmental interplay. On the basis of our current understanding of AA disease pathogenesis, several experimental and theoretical therapeutic approaches might be possible. However, the pathogenetic disease mechanism is particularly robust and the development of a cure for AA will be a significant challenge.