Onychomycosis and tinea capitis are prevalent fungal diseases that are difficult to cure and usually require systemic treatment. Onychomycosis has high recurrence rates and can significantly affect a patient's quality of life. Oral terbinafine has been approved for onychomycosis for 20 years in Europe and 15 years in the United States. Over these past 20 years, numerous studies show that oral terbinafine is a safe and efficacious treatment for onychomycosis. More recently, oral terbinafine also has been approved for tinea capitis. Once difficult to treat, terbinafine has revolutionised treatment of these fungal diseases. It has minimal side effects and its limited drug interactions make it an excellent treatment option for patients with co-morbidities. This review discusses oral terbinafine and new insights into the treatment of onychomycosis and tinea capitis. Recent publications have enhanced our knowledge of the mechanisms of oral terbinafine and its efficacy in treating onychomycosis. Oral terbinafine vs. other antifungal therapeutic options are reviewed. Overall, terbinafine remains a superior treatment for dermatophyte infections because of its safety, fungicidal profile, once daily dosing, and its ability to penetrate the stratum corneum.