The oil contains numerous chemicals known as terpenoids. Australian standards were established for the amount of one particular compound, terpinen-4-ol, which must make up at least 30% and preferably 40–50% of the oil for it to be medically useful. Another compound, cineole, should make up less than 15% and preferably 2.5% of the oil. The oil kills fungus and bacteria, including those resistant to some antibiotics.^{1, 2} For common acne, a double-blind trial compared the topical use of 5% tea tree oil to 5% benzoyl peroxide.³ Although the tea tree oil was slower and less potent in its action, it had far fewer side effects and was thus considered more effective overall.

A double-blind trial found that a 10% tea tree oil cream was as effective as anti-fungal medicine at improving symptoms associated with athlete’s foot, though it was not more effective than a placebo for eliminating the fungal infection.⁴ A double-blind trial found 100% tea tree oil applied topically was as effective as the anti-fungal medicine clotrimazole (Lotrimin®, Mycelex®) for people with fungus affecting the toe nails, a condition known as onychomycosis.⁵ In another double-blind trial with toenail fungus sufferers, a combination of 5% tea tree oil and 2% butenafine (Mentax®), a synthetic anti-fungal drug, in a cream proved more effective than an unspecified concentration of tea tree oil in cream alone.⁶ The results are not entirely surprising, as the tea tree product alone was probably not at a sufficiently high enough concentration to be effective.

A preliminary trial found that rinsing the mouth with 1 tablespoon (15 ml) tea tree oil solution four times daily effectively treated thrush (oral yeast infections) in AIDS patients.⁷ Solutions containing no more than 5% should be used orally and should never be swallowed.

A concern for hospital staff and patients is the spread of the bacteria Staphylococcus aureus—sometimes referred to as a “staph infection.” One small clinical trial found that use of a 4% tea tree oil nasal ointment as well as a 5% tea tree oil body wash was slightly more effective than standard drugs used to prevent the spread of the bacteria.⁸