Background: Many patients with chronic dermatophytosis and onychomycosis have depressed cell-mediated immunity (CMI) to trichophytin. Objective: The fungicidal properties of oral terbinafine provide a unique opportunity to explore whether elimination of antigen could restore CMI response in these patients. Methods: A double-blind, placebo-controlled study evaluated the effect of terbinafine (250 mg/d for 12 weeks) on skin immunoreactivity to intradermal trichophytin antigen (TRIPA), mycologic status of the nail, and nail growth in patients with toenail onychomycosis. Results: Skin reactivity, in an optimized, dose response challenge series to TRIPA was inversely related to disease chronicity. Mycologic/clinical response rates were 72%/84% for terbinafine and 0%/7% for placebo. Terbinafine increased the number of TRIPA reactors 2-fold and the mean TRIPA reaction area 4-fold; responses in placebo-treated patients were relatively unchanged. Of the 7 (of 25) patients receiving terbinafine who still had positive mycology 6 months after treatment, all were anergic to TRIPA at baseline and all but one remained so after treatment. Conclusion: Terbinafine treatment enhances and restores CMI to TRIPA in patients with Trichophyton rubrum onychomycosis and may thereby reduce susceptibility to reinfection. Terbinafine reversal of immunologic anergy may be an important model of microbial tolerance in chronic dermatophyte infections. (J Am Acad Dermatol 2002;46:371-5.)