Alopecia areata (AA) is an autoimmune-mediated disorder in which the proximal hair follicle (HF) attack results in non-scarring partial to total scalp or body hair loss. Despite the growing knowledge about AA, its exact cause still needs to be understood. However, immunity and genetic factors are affirmed to be critical in AA development. While the genome-wide association studies proved the innate and acquired immunity involvement, AA mouse models implicated the IFN-γ- and cytotoxic CD8+ T-cell-mediated immune response as the main drivers of disease pathogenesis. The AA hair loss is caused by T-cell-mediated inflammation in the HF area, disturbing its function and disrupting the hair growth cycle without destroying the follicle. Thus, the loss of HF immune privilege, autoimmune HF destruction mediated by cytotoxic mechanisms, and the upregulation of inflammatory pathways play a crucial role. AA is associated with concurrent systemic and autoimmune disorders such as atopic dermatitis, vitiligo, psoriasis, and thyroiditis. Likewise, the patient’s quality of life (QoL) is significantly impaired by morphologic disfigurement caused by the illness. The patients experience a negative impact on psychological well-being and self-esteem and may be more likely to suffer from psychiatric comorbidities. This manuscript aims to present the latest knowledge on the pathogenesis of AA, which involves genetic, epigenetic, immunological, and environmental factors, with a particular emphasis on immunopathogenesis.