Atopic dermatitis (AD) is a common chronic multifactorial skin disease that causes skin inflammation owing to defects in the skin barrier, immune dysregulation, or infectious agents. The most common treatment of AD utilizes wet-occlusion therapies to create a protective skin barrier by providing moisture to the epidermis. However, these treatments are suboptimal in managing disease symptoms owing to their limited ability to retain or restore skin hydration and inefficient drug delivery. Currently, there are no effective approaches for treating AD that are specifically designed to improve drug delivery efficacy and skin hydration. This study aims to introduce a new approach of localized drug delivery and facilitate more efficient dermal hydration using hydrogels and elastomers. Herein, we report a simple yet effective bilayer elasto-hydrogel adhesive film (BEHAF) dressing made from an interpenetrating alginate and polyacrylamide (alginate/AAm) hydrogel layer backed by a thin film of polydimethylsiloxane elastomer. In an in vitro hydration study, it was found that the BEHAF dressing enabled efficient retention and delivery of hydration to porcine skin and model epidermis for more than 48 h and showed potential for drug delivery of both hydrophobic and hydrophilic drugs. Furthermore, mechanical testing results indicate that the BEHAF mimics the elastic behavior of human skin and shows good adhesion sensitivity, thereby suggesting biomechanical compatibility and suitability for long-term usage. Overall, the BEHAF dressing may provide a viable vehicle for dermal hydration and drug delivery, thereby improving the efficacy of wet-occlusive therapy for treating AD.