Recognition and timely adequate treatment of erythema multiforme remain a major challenge. In this review, current diagnostic guidelines, potential pitfalls, and modern/novel treatment options are summarized with the aim to help clinicians with diagnostic and therapeutic decision-making. The diagnosis of erythema multiforme, that has an acute, self-limiting course, is based on its typical clinical picture of targetoid erythematous lesions with predominant acral localization as well as histological findings. Clinically, erythema multiforme can be differentiated into isolated cutaneous and combined mucocutaneous forms. Atypical erythema multiforme manifestations include lichenoid or granulomatous lesions as well as lesional infiltrates of T cell lymphoma and histiocytes. Herpes simplex virus infection being the most common cause, other infectious agents like-especially in children-Mycoplasma pneumoniae, hepatitis C virus, Coxsackie virus, and Epstein Barr virus may also trigger erythema multiforme. The second most frequently identified cause of erythema multiforme is drugs. In different studies, e.g., allopurinol, phenobarbital, phenytoin, valproic acid, antibacterial sulfonamides, penicillins, erythromycin, nitrofurantoin, tetracyclines, chlormezanone, acetylsalicylic acid, statins, as well as different TNF-α inhibitors such as adalimumab, infliximab, and etanercept were reported as possible implicated drugs. Recently, cases of erythema multiforme associated with vaccination, immunotherapy for melanoma, and even with topical drugs like imiquimod have been described. In patients with recurrent herpes simplex virus-associated erythema multiforme, the topical prophylactic treatment with acyclovir does not seem to prevent further episodes of erythema multiforme. In case of resistance to one virostatic drug, the switch to an alternative drug, and in patients non-responsive to virostatic agents, the use of dapsone as well as new treatment options, e.g., JAK-inhibitors or apremilast, might be considered.