Objective - To evaluate the effect of short term treatment with terbinafine on dermatophytosis. Design - Multicentre, randomised, double blind placebo controlled trial of 250 mg/day terbinafine for 12 weeks in dermatophyte onychomycosis. Setting - Eight dermatology centres in the United Kingdom. Patients - 112 patients (mean age 44, range 19-78), 99 with mycologically proved toenail infections and 13 with fingernail infections, of whom eight were subsequently excluded and 19 failed to complete the study. Intervention - Terbinafine 250 mg daily or placebo for 12 weeks. Follow up for 36 weeks after stopping treatment. Main outcome measures - Mycological cure (negative results on microscopy and culture) and clinical cure at the end of follow up, adverse events, and biochemical and haematological variables at monthly intervals during treatment. Results - After follow up 82% (37/45) (95% confidence interval 68% to 92%) mycological cure and 69% clinical cure' were recorded for evaluable patients treated with terbinafine for toenail infection and 71% (5/7) (30% to 96%) mycological cure and clinical cure for those treated for fingernail infection. The corresponding values for those treated with placebo were 12% (3% to 31%) mycological cure and no clinical cure for toenail infections and 33% (1% to 91%) mycological cure and no clinical cure for fingernail infections. On an intention to treat basis for toenail infections the figures were 73% (38/52) (58% to 85%) mycological cure for terbinafine compared with 6% (0% to 30%) for placebo (p < 0.007). Two withdrawals were related to adverse events with terbinafine, and there were no significant abnormal laboratory test results. Conclusion - 12 weeks' terbinafine is effective and safe treatment for nail dermatophytosis.