An antimicrobial essential oil. 5% gels helped mild acne and a 5% shampoo helped dandruff in trials, but it's a common allergen, especially once oxidized.
Tea tree oil is distilled from the leaves of an Australian tree. Its main component, terpinen-4-ol, kills bacteria and yeasts in the lab, including the acne bacterium and the yeast linked to dandruff. It turns up in acne gels, shampoos, body washes and some toothpastes.
The trials used 5%; many products contain far less or don't say. Neat oil irritates skin and is toxic if swallowed.
Small randomized trials support 5% tea tree oil for mild to moderate acne (better than placebo; slower than 5% benzoyl peroxide but with fewer side effects) and for dandruff (41% vs 11% improvement with placebo over 4 weeks). Trials are small and short, and contact allergy is well documented.
124 patients with mild to moderate acne used 5% tea tree oil gel or 5% benzoyl peroxide lotion; both reduced inflamed and non-inflamed lesions, tea tree oil more slowly but with fewer side effects.
60 patients with mild to moderate acne used 5% tea tree oil gel or placebo for 45 days; tea tree oil was 3.55 times more effective on total lesion count and 5.75 times on severity, with similar, tolerable side effects.
126 people with mild to moderate dandruff used 5% tea tree oil shampoo or placebo daily for 4 weeks; severity scores improved 41% versus 11%, with no adverse effects.
Three prepubertal boys developed breast enlargement while using products containing lavender and tea tree oils; it resolved after they stopped, and both oils showed weak estrogenic and anti-androgenic activity in human cell lines. Causation was disputed in later correspondence.
Tea tree oil has caused more published allergic reactions than any other essential oil; 0.1-3.5% of people patch-tested react. Fresh oil is a weak-to-moderate sensitiser, but oxidised (old, air-exposed) oil is much stronger. Most cases come from neat oil, a minority from cosmetics.