Strictly speaking the term hypoallergenic refers to a product less likely to induce an allergic reaction than other products in the same category with similar functions. The term is interpreted both by consumers and professionals to mean a reduced risk for a broader range of possible adverse reactions including irritation. The origin and regulatory history of this designation is reviewed. Many consumers self-identify as having sensitive skin and may not differentiate allergy from irritation. The various forms of cosmetic intolerance are reviewed. Products claiming to be hypoallergenic should be formulated to minimize the potential for all types of adverse reactions. Guidelines for formulating hypoallergenic products are presented. These include careful ingredient selection, omission of fragrance, utilization of the least sensitizing preservative systems and minimizing ingredients that may disrupt the skin barrier such as surfactants. Strict raw material guidelines should be followed to assure ingredient purity. Pre-market safety testing of final formulations should comprise repeat insult patch and controlled product use testing. Cumulative irritation studies, phototesting and supervised usage trials employing special panels of test subjects prone to various forms of sensory irritation may be indicated for certain types of products.