Pediatric atopic dermatitis (AD), also known as childhood eczema, is a skin condition that may cause a rash and itching due to inflammation of the skin. The purpose of this study is to assess the change in disease activity (Efficacy) and to assess the safety of upadacitinib in combination with topical corticosteroids (TCS) in pediatric participants 2 to 11 years of age in Japan with moderate to severe AD who are candidates for systemic therapy. Upadacitinib is approved for the treatment of moderate to severe AD in adults and adolescents 12 years of age and older in many countries, including Japan. This study comprises a 35-day screening period; a 12-week, randomized, double-blind treatment period where there will be a 1 in 2 chance that a participant is assigned placebo. This will be followed by an open-label upadacitinib treatment period up to Week 52. Around 98 participants will be enrolled in the study at approximately 35 sites in Japan. Participants will receive upadacitinib oral tablets, or matching placebo, once daily (or an adult equivalent oral solution dose twice a day) for up to 52 weeks. There may be higher treatment burden for participants in this trial compared to their standard of care . Participants will attend regular visits during the study at a hospital or clinic. The effect of the treatment will be checked by clinical assessments, blood tests, checking for side effects and completing questionnaires.