Skin tone recognition and generation play important roles in model fairness, healthcare, and generative AI, yet they remain challenging due to the lack of comprehensive datasets and robust methodologies. Compared to other human image analysis tasks, state-of-the-art large multimodal models (LMMs) and image generation models struggle to recognize and synthesize skin tones accurately. To address this, we introduce TrueSkin, a dataset with 7299 images systematically categorized into 6 classes, collected under diverse lighting conditions, camera angles, and capture settings. Using TrueSkin, we benchmark existing recognition and generation approaches, revealing substantial biases: LMMs tend to misclassify intermediate skin tones as lighter ones, whereas generative models struggle to accurately produce specified skin tones when influenced by inherent biases from unrelated attributes in the prompts, such as hairstyle or environmental context. We further demonstrate that training a recognition model on TrueSkin improves classification accuracy by more than 20\% compared to LMMs and conventional approaches, and fine-tuning with TrueSkin significantly improves skin tone fidelity in image generation models. Our findings highlight the need for comprehensive datasets like TrueSkin, which not only serves as a benchmark for evaluating existing models but also provides a valuable training resource to enhance fairness and accuracy in skin tone recognition and generation tasks.