Malassezia spp are recognized as skin commensals that may be pathogenic under certain conditions. For many years, it was known as commensals but recently it has been identified causing many superficial skin infections and fungemia. There are many hypotheses regarding the pathogenesis of Malassezia infections. As there is limited data on physiology and pathogenesis of Malassezia, therefore, in recent years new tools has been evolved for Malassezia culture, detection and genetic manipulation which have revealed the ubiquity of Malassezia on skin. As Malassezia cannot synthesize fatty acid, it secretes various enzyme such as lipase, phospholipase, protease and esterase to compensate it. These enzymes act as virulence factors for skin disorder caused by Malassezia. The mechanism behind the switching over of commensals to pathogen is unclear. The genetic and host susceptibility plays a vital role in commensalism and pathogenesis of Malassezia. This review article will discuss the pathogenesis and commensalism of Malassezia species in human skin.