The immunologic aberrations associated with atopic dermatitis include the paradox of reduced cell-mediated immune responses in the setting of increased cell-mediated immunity features that resemble allergic contact dermatitis. In this review, we present evidence that abnormalities in monocytes and Langerhans cells alter the function of T-helper-cell sub-populations to cause the immunologic defects associated with atopic dermatitis. Increased monocyte prostaglandin E 2 production inhibits Th1 responses, accentuating interleukin (IL)-4 secretion by Th2 cells. Elevated prostaglandin E 2 secretion correlates with abnormally increased cyclic adenosine mono-phosphate-phosphodiesterase activity in monocytes and this, along with other defective inflammatory cell responses, can be normalized in vitro by phosphodiesterase inhibitors. It appears that in addition to prostaglandin E 2 , IL-10 acts to regulate the balance between Th1 and Th2 functional responses accounting for many atopic features, including increased IL-4, IL-5, and IL-6 production by T cells; increased IgE synthesis; decreased interferon-γ production; and impaired cell-mediated immune responses. All of these abnormalities can be related to increased phosphodiesterase activity in atopic monocytes, and inhibition of this key enzyme appears to reverse atopic dermatitis inflammatory abnormalities in vitro and in vivo.