Aim: Tea tree oil (TTO) is immensely popular for various topical applications. In vitro studies have repeatedly demonstrated that it has antibiotic activity. This article is an attempt to systematically review the evidence from randomised clinical trials for or against effectiveness of external TTO in dermatological conditions. Methods:Six electronic databases were searched. Methodological quality was assessed by Jadad score. Data were extracted and validated in a standardised fashion by two independent reviewers. Results:Only 4 trials were located. They suggest that TTO may be effective as a treatment of acne and fungal infections. The evidence is promising but by no means compelling. The adverse effects of TTO are usually mild and transient. They mainly consist of allergic reactions. Conclusions:It is concluded that, so far, there is no compelling evidence to show that TTO is efficacious in any dermatological condition. However, in view of promising findings, TTO deserves to be investigated more closely.