Atopic dermatitis (AD) has become a common childhood disease that affects a large number of children worldwide and has become a chronic skin disease that causes huge economical and psychological damage to the whole family. Despite the use of steroids, immunosuppressants, and various topical preparation, the prognosis is still poor. Hence, this review aimed to explore the potential of using essential oils (EO) as an active ingredient in managing AD. The review was completed by using Pubmed, Scopus, and Medline to search for relevant articles that study the pathophysiology of AD, the properties of EO, the use of EO in managing AD, and the suitable advanced formulation to incorporate EO. From the review conducted, it was concluded that EO have huge potential in managing AD and can be used as complimentary therapeutic agents in AD treatment. Scientists and industries should venture into commercializing more topical products with EO to help manage AD more effectively.