Tea tree oil (an essential oil derived primarily from the Australian native Melaleuca alternifolia) has been used as a topical antiseptic agent since the early part of this century for a wide variety of skin infections; however, to date, the evidence for its efficacy in fungal infections is still largely anecdotal. One hundred and four patients completed a randomized, double-blind trial to evaluate the efficacy of 10% w/w tea tree oil cream compared with 1% tolnaftate and placebo creams in the treatment of tinea pedis. Significantly more tolnaftate-treated patients (85%) than tea tree oil (30%) and placebo-treated patients (21%) showed conversion to negative culture at the end of therapy (p < 0.001); there was no statistically significant difference between tea tree oil and placebo groups. All three groups demonstrated improvement in clinical condition based on the four clinical parameters of scaling, inflammation, itching and burning. The tea tree oil group (24/37) and the tolnaftate group (19/33) showed significant improvement in clinical condition when compared to the placebo group (14/34; p = 0.022 and p = 0.018 respectively). Tea tree oil cream (10% w/w) appears to reduce the symptomatology of tinea pedis as effectively as tolnaftate 1% but is no more effective than placebo in achieving a mycological cure. This may be the basis for the popular use of tea tree oil in the treatment of tinea pedis.