The essential oil of Melaleuca alternifolia (tea tree) exhibits broad-spectrum antimicrobial activity. Its mode of action against the Gram-negative bacterium Escherichia coli AG100, the Gram-positive bacterium Staphylococcus aureus NCTC 8325, and the yeast Candida albicans has been investigated using a range of methods. We report that exposing these organisms to minimum inhibitory and minimum bactericidal/fungicidal concentrations of tea tree oil inhibited respiration and increased the permeability of bacterial cytoplasmic and yeast plasma membranes as indicated by uptake of propidium iodide. In the case of E. coli and Staph. aureus, tea tree oil also caused potassium ion leakage. Differences in the susceptibility of the test organisms to tea tree oil were also observed and these are interpreted in terms of variations in the rate of monoterpene penetration through cell wall and cell membrane structures. The ability of tea tree oil to disrupt the permeability barrier of cell membrane structures and the accompanying loss of chemiosmotic control is the most likely source of its lethal action at minimum inhibitory levels.