Staphylococcus epidermidis is a ubiquitous skin commensal with a complex and dual role in atopic dermatitis (AD). While it contributes to skin barrier function and pathogen defense, it also acts as an opportunistic pathogen in the dysbiotic AD skin environment. This review explores the complex interplay between its beneficial and pathogenic behaviors specifically in the context of AD through a comprehensive literature analysis. S. epidermidis exhibits strain-specific pathogenicity, directly contributing to AD pathology via the EcpA protease and lesional biofilms. Conversely, it engages in microbial antagonism, inhibiting Staphylococcus aureus through quorum sensing disruption and bacteriocin production, offering protective benefits in AD. Its role as a reservoir for antibiotic resistance genes, however, complicates treatment. This duality underscores the need for strain-specific approaches for managing AD to harness its benefits while mitigating its risks.