The essential oil of Melaleuca alternifolia, also known as tea tree or melaleuca oil, is widely available and has been investigated as an alternative antimicrobial, anti-inflammatory and anti-cancer agent. While these properties are increasingly well characterised, relatively limited data are available on the safety and toxicity of the oil. Anecdotal evidence from almost 80 years of use suggests that the topical use of the oil is relatively safe, and that adverse events are minor, self-limiting and occasional. Published data indicate that TTO is toxic if ingested in higher doses and can also cause skin irritation at higher concentrations. Allergic reactions to TTO occur in predisposed individuals and may be due to the various oxidation products that are formed by exposure of the oil to light and/or air. Adverse reactions may be minimised by avoiding ingestion, applying only diluted oil topically and using oil that has been stored correctly. Data from individual components suggest that TTO has the potential to be developmentally toxic if ingested at higher doses, however, TTO and its components are not genotoxic. The limited ecotoxicity data available indicate that TTO is toxic to some insect species but more studies are required.