The skin surface hosts diverse skin microbiota, including bacteria, fungi, and viruses. Intricate interactions between the skin microenvironment and microbial community are crucial for maintaining cutaneous homeostasis. This review explores the bidirectional relationship between the skin ecosystem and its microbiota. The skin microenvironment is shaped by a combination of intrinsic factors, dominated by sweat glands and pilosebaceous units, and external factors, such as UV radiation and personal care products, which create distinct niches that influence microbial colonization patterns across different skin regions. The skin microbiome, in turn, modulates the physical, chemical, immunological, and microbial barriers of the skin. We also discuss the alterations in this crosstalk in various immune-related skin conditions such as atopic dermatitis, psoriasis, rosacea, hidradenitis suppurativa, skin cancer, and aging. Understanding these interactions is vital for developing targeted microbiome-based therapies for various skin disorders. Further researches are needed to deepen insights into the microbial roles and their therapeutic potentials in skin health and disease.