Onychomycosis is an increasingly common and recalcitrant fungal nail infection world-wide. The purpose of this placebo-controlled, double-blind study was to determine the clinical efficacy, chemical avulsion, and tolerability of 2% butenafine hydrochloride and 20% urea incorporated in a cream to cure toenail onychomycosis in a preselected population. Sixty patients (38M, 22F), ranging between 18 and 60 years (mean 27.4), with more than 25% involvement of the big toenail were enrolled in the study. The diagnosis of onychomycosis was established by mycologic identification and reconfirmed by positive fungal culture. A precoded 25-g tube was randomly assigned to each patient (50 active and 10 placebo) with instructions to apply the trial medication to their infected toenail twice daily with an occlusive dressing for one week. The affected nail was removed with a nail clipper. No occlusive dressing was maintained after the initial one week regimen. To assess the chemical avulsion of the infected toenail, mycologic cure, clinical effectiveness of the treatment, and overall success, patients were examined twice a week for 16 weeks and thereafter on a weekly basis for a further 36 weeks. The treatment was well tolerated by all the patients throughout the study, with no dropouts. Marked improvement was seen in 73.3% patients after weeks 8, 16 and 24 with clinically and mycologically confirmed negative fungal culture. Code disclosure revealed that active butenafine and urea cream cured significantly more patients than placebo (88% versus 0%; p < 0.0001). Of the 60 patients 91.6% reported no drug-related adverse symptoms. Five patients reported non-objective mild inflammation without discontinuation of the treatment. During one year follow-up of the study phase, none of the cured patients had a relapse. In conclusion, the mycologic and overall assessment of this study demonstrate that 2% butenafine HCl and 20% urea incorporated in a cream for keratinolysis is safe to use and significantly more effective than placebo in curing big toenail onychomycosis.