Background: Dandruff appears to be related to the yeast Pityrosporum ovale. Tea tree oil has antifungal properties with activity against P ovale and may be useful in the treatment of dandruff. Objective: We conducted a randomized, single-blind, parallel-group study to investigate the efficacy and tolerability of 5% tea tree oil and placebo in patients with mild to moderate dandruff. Methods: One hundred twenty-six male and female patients, aged 14 years and older, were randomly assigned to receive either 5% tea tree oil shampoo or placebo, which was used daily for 4 weeks. The dandruff was scored on a quadrant-area-severity scale and by patient self-assessment scores of scaliness, itchiness, and greasiness. Results: The 5% tea tree oil shampoo group showed a 41% improvement in the quadrant-area-severity score compared with 11% in the placebo group (P < .001). Statistically significant improvements were also observed in the total area of involvement score, the total severity score, and the itchiness and greasiness components of the patients' self-assessments. The scaliness component of patient self-assessment improved but was not statistically significant. There were no adverse effects. Conclusion: Five percent tea tree oil appears to effective and well tolerated in the treatment of dandruff. (J Am Acad Dermatol 2002;47:852-5.)