Fluorescence lifetime (FLT) of fluorophores is sensitive to the changes in their surrounding microenvironment, and hence it can quantitatively reveal the physiological characterization of the tissue under investigation. Fluorescence lifetime imaging microscopy (FLIM) provides not only morphological but also functional information of the tissue by producing spatially resolved image of fluorophore lifetime, which can be used as a signature of disorder and/or malignancy in diseased tissues. In this paper, we begin by introducing the basic principle and common detection methods of FLIM. Then the recent advances in the FLIM-based diagnosis of three different skin cancers, including basal cell carcinoma (BCC), squamous cell carcinoma (SCC) and malignant melanoma (MM) are reviewed. Furthermore, the potential advantages of FLIM in skin cancer diagnosis and the challenges that may be faced in the future are prospected.