From their original description, fungi of the genus Malassezia (previously Pityrosporum) have been associated with dandruff and seborrhoeic dermatitis. The principle evidence on which this connection was based was that the organisms were present, often in high numbers, on the skin in these conditions and that both responded to treatment that inhibited or destroyed Malassezia yeasts. The availability of new tools such as genomic and proteomic analyses has begun to provide a new insight into the pathogenetic mechanisms involved. New evidence shows the production of specific phospholipases on affected skin sites in dandruff and signalling molecules such as malassezin in seborrhoeic dermatitis. It is still not clear why those individuals and skin sites, prone to either disease, are particularly associated with the presence of these marker molecules but these studies are providing clues to the different ways in which organisms, which are normally commensals, interact with human skin.