IL-37 was discovered as an anti-inflammatory and immunosuppressive cytokine of the IL-1 family. Significant advancements in the understanding of signaling pathways associated with IL-37 have been made in recent years. IL-37 binds to IL-18R and recruits IL-1R8 to form the IL-37/IL-1R8/IL-18Rα complex. Capase-1 plays a key role in the nuclear transduction of IL-37 signal, processing precursor IL-37 into the mature isoform, and interacting with Smad3. IL-37 exerts its role by activating anti-inflammation pathways including AMPK, PTEN, Mer, STAT3 and p62, and promoting tolerogenic dendritic cells and Tregs. In addition, IL-37 inhibits pro-inflammatory cytokines such as IL-1, IL-6, IL-8, IL-17, IL-23, TNF-α, and IFN-γ, and suppresses Fyn, MAPK, TAK1, NFκB, and mTOR signaling. The final effects of IL-37 depend on the interaction among IL-18R, IL-1R8, IL-37 and IL-18BP. Previous studies have deciphered the role of IL-37 in the development and pathogenesis of autoimmune diseases, chronic infections and cancer. In this review, we discuss the role of IL-37 in psoriasis, atopic dermatitis, Behcet’s diseases, systemic lupus erythematosus, and other skin and connective tissue diseases.