Skin in the human body plays a major role being a dermal barrier, maintains homeostasis, and is a vital route for the administration of cosmetics and pharmaceutical formulations. Currently, skin diseases are also posing a threat globally, being ranked fourth among non-fatal diseases. Preclinical studies of drugs and therapeutics are required to be performed at a faster rate and ensure that the results obtained are accurate. Using conventional methods of animal testing is leading to high failure rates and an expensive drug development process. To circumvent these limitations, miniaturized microfluidic devices are gaining immense popularity with respect to diagnostics, biomedical research, and drug testing. Skin-on-Chip is one of the micro-engineered biomimetic platforms that can be used as an alternative to animal testing in preclinical studies. This review gives a brief overview of the limitations in the conventional drug development process. It gives clear insights into the general designing of the skin-on-chip device and collates recent developments that skin-on-chip models are subjected to, with an overview of the side effects testing of sorafenib using the skin-on-chip model. Integration of microsensors is also summarized in this review. The use of iPSCs and Skin-on-Chip in a combination resulting in better in vitro skin models is also highlighted. Further, this review gives information about the utilizations of Skin-on-a-Chip models in diffusion studies, wound healing, and progress in precision medicine tailored to the person. Finally, the potential challenges that have to be overcome for its widespread utilization are elucidated.