Background: Alopecia areata (AA), an autoimmune condition causing non-scarring hair loss, often coexists with atopic dermatitis (AD) due to shared T-helper cell type 2 (Th2)-mediated pathways. Dupilumab, a monoclonal antibody inhibiting IL-4 and IL-13 signaling, is a cornerstone treatment for AD but has conflicting reports regarding its impact on AA, with some suggesting therapeutic benefits and others indicating AA induction. Methods: This retrospective study, utilizing the TriNetX Research Network’s de-identified data from over 300 million patient records, investigates the association between dupilumab use and AA risk in AD patients. Results: After propensity score matching, 23,782 dupilumab users were compared with an equal number of controls. Results revealed a statistically significant increased AA risk in dupilumab users (odds ratio: 1.436, 95% CI: 1.066–1.935, p = 0.0167) after 16 weeks. Cases occurring within 16 weeks were excluded. Conclusions: Potential mechanisms include immune rebalancing, with Th2 suppression possibly upregulating Th1/Th17 pathways or unmasking latent AA in predisposed individuals. These findings challenge dupilumab’s potential as an AA treatment and highlight the need for vigilant monitoring, including routine scalp examinations and patient education. Future research should focus on mechanistic pathways, risk stratification, and comparative studies with other biologics to optimize personalized treatment strategies for AD and AA.