The skin epidermis is the body's main defense against dehydration and harmful substances. We used germ-free mice to show that the microbiota is essential for proper differentiation and repair of the epidermal barrier. This effect is mediated by the aryl hydrocarbon receptor (AHR), a regulator of epidermal differentiation. We hypothesized that the skin microbiota activates AHR to promote barrier repair. Tryptophan metabolites, which are potent AHR ligands, are enriched in the skin's outermost layer (stratum corneum) and can be produced by microbial metabolism. We constructed metabolic enzyme profiles and mined them against healthy human skin metagenomes. These analyses revealed motif enrichment for enzymes that metabolize tryptophan to indole and its derivatives. To identify microbially regulated tryptophan metabolites in vivo, we established a gnotobiotic model with 50 skin commensals from healthy humans and performed targeted mass spectrometry on murine skin. We found three novel indole-related metabolites that are regulated by microbes and tested therapeutic efficacy in a murine model of atopic dermatitis. We provide a novel ecological framework that demonstrates that microbiota regulates skin barrier formation and repair via tryptophan metabolism. This knowledge can guide the development of precise microbe-based therapies for various skin disorders characterized by impaired epidermal barrier function.