Summary Controlled trials and clinical experience indicate that systemic cyclosporin A and tacrolimus are effective treatments for psoriasis, and that cyclosporin A also improves atopic eczema. A variety of other inflammatory and non‐inflammatory skin diseases are probably also responsive to these drugs. However, the widespread and longer‐term use of cyclosporin A and tacrolimus are limited by side effects. The molecular mechanisms of action of cyclosporin A, tacrolimus and a related drug, sirolimus, have been well defined in T cells and involve inhibition of critical signalling pathways that regulate T cell activation. For example cyclosporin and tacrolimus inhibit calcineurin phosphatase activity and thereby inhibit activation of the transcription factor NFAT. The therapeutic efficacy of topical calcineurin inhibitors in atopic eczema have restimulated interest in the mechanism of action of these drugs in skin disease. Recently the expression pattern of calcineurin and NFAT has been defined in non‐immune tissues including the akin. The relevance of this to the mechanism of action of systemic and topical calcineurin inhibitors and sirolimus in skin disorders is discussed.