Lichen planus (LP) is a chronic inflammatory disease that affects the skin, nails, urogenital tract, and oral mucosa. It ranges from mild inflammation to the destruction of the epithelial surface with painful wounds and squamous cell carcinoma development. The LP lesion differences in location and morphology determine the clinical disease subtypes which all share a histological feature of dense band-like sub-epithelial infiltration of lymphocytes and keratinocyte apoptosis. Despite the well-characterized clinical manifestations of LP, its pathogenesis remains mostly unknown. Recent studies revealed a role of IFN-γ signaling that renders keratinocytes more susceptible to T-cell-mediated cytotoxicity via upregulation of MHC class I molecules. Targeting IFN-γ signaling in LP has been proposed as a treatment option. These latest developments in research on the etiology of LP will be discussed herein.