Dermatochalasis is caused by a loss of elasticity in the connective tissue supporting the structure of the front portion of the eyelid. Normally, in Caucasians, the orbicularis muscle and overlying skin form a crease near the tarsal border. In dermatochalasis, the excess tissues hangs down, over the front edge of the eyelid. The excess tissue can sometimes obstruct the visual field, especially the superior visual field. In severe cases, it may obstruct as much as 50 percent of the superior visual field.

People with dermatochalasis often also have blepharitis, a condition caused by the plugging of glands in the eye that produce lubricating fluid (meibomian glands). Dermatochalasis can be severe enough that it pushes the eyelashes into the eye, causing entropion.

Weakness in the orbital septum may cause the herniation of the orbital fat pads. This is observed as the presence of bulges (fat pads) in the soft tissue of the baggy eyes.

Blepharochalasis results from recurrent bouts of painless eyelid swelling, each lasting for several days. This is thought to be a form of localized angioedema, or rapid accumulation of fluid in the tissues. Recurrent episodes lead to thin and atrophic skin. Damage to the levator palpebrae superioris muscle causes ptosis, or drooping of the eyelid, when the muscle can no longer hold the eyelid up.

Dermatochalasis is sometimes confused with blepharochalasis, but these are two different conditions.