The prevalence of allergic diseases continues to rise globally in developed countries. Since the initial proposal of the hygiene hypothesis, there has been increasing evidence to suggest that the intestinal microbiota, particularly during early infancy, plays a critical role in regulating immune responses associated with the development of atopy. This review evaluates the key epidemiologic and mechanistic data published to date. Epidemiological data have provided the framework for animal studies investigating the importance of gut commensals in allergy development. These studies provide new insights about the microbial regulation of mucosal immune responses inside and outside the gut, and how these effects may drive allergic inflammation in susceptible individuals. Specific immune cells have been identified as mediators of these microbiota-regulated allergic responses. In the last year, technological advances have provided us with a better understanding of the gut microbiome in healthy and allergic individuals. Recent studies have identified the associations between particular gut microbes and different disease phenotypes, as well as identified immune cells and their mediators involved in allergy development. This research has provided a number of host and microbe targets that may be used to develop novel therapies suitable for the treatment or prevention of allergic diseases.