Potassium hydroxide (KOH) preparation is an underutilized modality in the diagnosis of mycotic keratitis. We have earlier shown its utility in the diagnosis of Nocardia and Acanthamoeba keratitis. The aim of this study was (i) to evaluate the sensitivity, specificity and predictive value of KOH preparation, and (ii) to compare its efficacy with other methods of corneal scraping examination, for the diagnosis of mycotic keratitis. The study was conducted in two phases. In phase I, randomized corneal scrapings were examined by KOH, Gram's stain, and lactophenol cotton blue (LPCB) in 91 infectious keratitis subjects. In phase II, 53 corneal scrapings were stained with KOH and calcofluor white (CFW), and viewed with bright field (KOH) and fluorescence (CFW) microscopy. The KOH and CFW readings were recorded by an observer masked to the clinical findings and culture results. Nineteen scrapings were examined by two masked observers. In 22 culture positive fungal keratitis patients in phase I, the sensitivity of KOH, Gram's stain, and LPCB methods was 100%, 86.4%, and 77.3%, respectively. In phase II, the specificities of KOH and CFW were identical (83.8%), while the sensitivities were 81.2% and 93.7%, respectively (p = 0.59), in 16 culture positive mycotic keratitis patients. There was no significant difference between the negative and positive predictive values of KOH and CFW. Furthermore, no significant interobserver variability was found in the specificity and sensitivity. The KOH method compares well with other microscopy methods in the diagnosis of keratomycosis and has a definite place in the armamentarium of diagnostic techniques.