Summary Conventional culture‐based studies have suggested that a reduction in microbial exposure in early life predisposes to atopic eczema and allergies. However, molecular microbiological methods have shown that conventional culture fails to grow around 80% of the bacterial flora. More recent work reviewed in this paper has employed next generation sequencing to study the influence of the gut and skin microbiota, both with regard to the risk of developing atopic eczema but also the role of pathogenic and commensal bacteria in established disease. Birth cohorts investigating the gastrointestinal tract reported reduced faecal microbiota diversity among those who later developed atopic eczema, using gel electrophoresis, real‐time PCR or 16S ribosomal RNA gene pyrosequencing. However, the inverse association with reduced faecal bacterial diversity was not confirmed in cross‐sectional studies among patients with established atopic eczema. Only two studies investigated the cutaneous microbiota in a longitudinal study design and both were unable to provide evidence that Staphylococcus aureus colonisation precedes the development of atopic eczema. Next generation sequencing has confirmed the cross‐sectional association between atopic eczema and S. aureus colonisation. The two studies that used this approach have also shown that disease flares are associated with a significant fall in skin microbiota diversity and an increase in the relative abundance of both S. aureus and epidermidis. Interestingly, S. aureus elimination does not appear to be the main reason why atopic eczema improves after a flare and antimicrobial and anti‐inflammatory therapy enhances bacterial diversity. Further, well‐phenotyped birth cohorts that take key confounders, such as antibiotic exposure, into account are required. What's already known about this topic? Culture‐based studies have shown strong associations between cutaneous Staphylococcus aureus colonisation and established atopic eczema during and outside of the context of disease flares. Using the same approach, there is also evidence for an inverse relationship between gut bacterial diversity in early life and the later development of atopic eczema, in keeping with the ‘biodiversity hypothesis’. However, bacterial culture misses around 80% of the bacteria detectable with next generation pyrosequencing. What does this study add? 16S rRNA sequencing has shown that both Staphylococcus aureus and epidermidis proliferate whilst bacterial diversity drops at lesional sites when atopic eczema flares, but S. aureus elimination is not the main reason why atopic eczema gets better. Next generation sequencing studies have not found evidence that S. aureus colonisation triggers atopic eczema development, although the current body of literature is very small. In addition, there is further evidence that a reduced diversity of the faecal microbiota precedes the development of atopic eczema, an association that appears lost in established disease.