Commensal fungi of the mammalian skin, such as those of the genus Malassezia, are associated with atopic dermatitis and other common inflammatory skin disorders. Understanding of the causative relationship between fungal commensalism and disease manifestation remains incomplete. By developing a murine epicutaneous infection model, we found Malassezia spp. selectively induce IL-17 and related cytokines. This response is key in preventing fungal overgrowth on the skin, as disruption of the IL-23-IL-17 axis compromises Malassezia-specific cutaneous immunity. Under conditions of impaired skin integrity, mimicking a hallmark of atopic dermatitis, the presence of Malassezia dramatically aggravates cutaneous inflammation, which again was IL-23 and IL-17 dependent. Consistently, we found a CCR6+ Th17 subset of memory T cells to be Malassezia specific in both healthy individuals and atopic dermatitis patients, whereby the latter showed enhanced frequency of these cells. Thus, the Malassezia-induced type 17 response is pivotal in orchestrating antifungal immunity and in actively promoting skin inflammation. Display omitted •The skin commensal yeast Malassezia drives type 17 immunity in the skin•Malassezia-specific human memory T cells display a Th17 phenotype•Mice deficient in IL-17AF or IL-23 show uncontrolled Malassezia growth on the skin•In the disrupted skin, IL-23 and IL-17AF promote Malassezia-induced inflammation The skin commensal yeast Malassezia is associated with common skin disorders like atopic dermatitis, but how the mammalian host responds to Malassezia remains unclear. Using an epicutaneous infection model in mice, Sparber et al. demonstrate that the IL-23-IL-17 pathway controls fungal colonization and also drives Malassezia-induced inflammation in atopy-like skin.