Dermatophytosis is among the most widespread fungal infections worldwide, affecting the keratinized tissues of the skin, hair, and nails and posing a persistent challenge to public health. Despite the availability of conventional antifungal drugs, treatment outcomes are often compromised by prolonged therapy, recurrence, adverse effects, and the growing threat of antifungal resistance. These limitations have accelerated the search for novel, nature-inspired therapeutics capable of offering safer and more effective disease management. In this context, medicinal plants have emerged as valuable sources of multifunctional bioactive compounds with significant antifungal potential. Azadirachta indica A. Juss. (Neem), a cornerstone of traditional medicine, has gained increasing scientific attention as a promising plant-derived therapeutic against dermatophytosis. Its pharmacological efficacy is attributed to a diverse array of phytochemicals, including azadirachtin, nimbidin, nimbin, gedunin, salannin, quercetin, and other limonoids, which collectively exhibit antifungal, anti-inflammatory, antioxidant, and skin-protective activities. Unlike conventional agents that primarily target fungal growth, neem-derived compounds offer a multi-target approach by inhibiting dermatophyte proliferation, reducing oxidative stress, modulating inflammatory responses, and promoting tissue regeneration. Recent in vitro and in vivo studies have demonstrated significant activity of neem extracts and formulations against major dermatophytes, including Trichophyton, Microsporum, and Epidermophyton species. Furthermore, advances in herbal nanotechnology, such as nanoemulsions and nanogels, have enhanced the delivery and therapeutic performance of neem bioactives. This review comprehensively examines the phytochemistry, antifungal mechanisms, experimental evidence, and future translational prospects of Azadirachta indica, highlighting its potential as a next-generation botanical strategy for the sustainable management of dermatophytosis.