As a first host barrier, the skin is constantly exposed to environmental insults that perturb its integrity. Tight regulation of skin homeostasis is largely controlled by the aryl hydrocarbon receptor (AhR). Here, we demonstrate that Henna and its major pigment, the naphthoquinone Lawsone activate AhR, both in vitro and in vivo. In human keratinocytes and epidermis equivalents, Lawsone exposure enhances the production of late epidermal proteins, impacts keratinocyte differentiation and proliferation, and regulates skin inflammation. To determine the potential use of Lawsone for therapeutic application, we harnessed human, murine and zebrafish models. In skin regeneration models, Lawsone interferes with physiological tissue regeneration and inhibits wound healing. Conversely, in a human acute dermatitis model, topical application of a Lawsone-containing cream ameliorates skin irritation. Altogether, our study reveals how a widely used natural plant pigment is sensed by the host receptor AhR, and how the physiopathological context determines beneficial and detrimental outcomes.