Background: Melasma is a commonly found hyperpigmentary disorder in dark-complexioned persons, which is rather difficult to treat. Azelaic acid (AZA) 20% is considered efficacious in the treatment of melasma, although the response is rather slow. It has also been combined synergistically with topical retinoic acid, where the results were satisfactory. Objective: The study was done to evaluate the usefulness of a sequential therapy of potent topical steroids +20% AZA cream versus only 20% AZA cream in the treatment of melasma. Methods: This was a prospective, single-blind, right-left comparison pilot study with (1) twice daily application of 20% AZA to one half of the face for 24 weeks and (2) a potent topical steroid, 0.05% clobetasol propionate cream, to be applied for 8 weeks only and then to be followed by 20% AZA cream only for the next 16 weeks on the other half. Concomitant use of a broad-spectrum sunscreen was also mandatory. Thirty Indian patients (25 females, 5 males), whose ages ranged from 21 to 45 years and who were not pregnant, nursing or on any concurrent therapy, completed the study. Clinical evaluation, photography and the overall response were assessed at 4, 8, 16 and 24 weeks. Results: At 4, 8 and 16 weeks, the lightening of melasma was significantly more marked on the side receiving the sequential therapy rather than the side receiving only 20% AZA cream (p < 0.001). However, at 24 weeks, although the difference was still significant (p = 0.0052), as many as 96.7 and 90% of patients of each group (sequential therapy and AZA) had good to excellent responses to treatment. The side-effects noted were mostly mild and transient and mainly local irritant effects. Conclusions: A sequential therapy of topical potent steroids +20% AZA cream can be considered as another alternative treatment for melasma, which combines the beneficial effects of both besides perhaps increasing the compliance of the patients. 20% AZA monotherapy itself is also an effective and well-tolerated therapy for melasma in dark-skinned races.