Dermatophytosis is a common superficial fungal infection of the skin and its appendages caused by dermatophytes. Recent times have witnessed a dynamic evolution of dermatophytes driven by their ecology, reproduction, pathogenicity and host immune response, influenced by population migration and socioeconomic status. Dermatophytes establish infection following successful adherence of arthroconidia to the surface of keratinized tissues. The proteolytic enzymes released during adherence and invasion not only ascertain their survival but also allow the persistence of infection in the host. While the cutaneous immune surveillance mechanism, after antigen exposure and presentation, leads to activation of T lymphocytes and subsequent clonal expansion generating effector T cells that differentially polarize to a predominant Th17 response, the response fails to eliminate the pathogen despite the presence of high levels of IFN-γ. In chronic dermatophytosis, antigens are a constant source of stimulus promoting a dysregulated Th17 response causing inflammation. The host-derived iTreg response fails to counterbalance the inflammation and instead polarizes to Th17 lineage, aggravating the chronicity of the infection. Increasing antifungal resistance and recalcitrant dermatophytosis has impeded the overall clinical remission. Human genetic research has the potential to generate knowledge to explore new therapeutic targets. The review focuses on understanding specific virulence factors involved in pathogenesis and defining the role of dysregulated host immune response against chronic dermatophytic infections for future management strategies.