Onychomycosis is a public health concern because of its high worldwide incidence and prevalence, and its potential for spread of fungal elements to others, as well as complications such as cellulitis, bacterial infection, pain, and extensive dermatophytic infections. The incidence of onychomycosis has been increasing, particularly in individuals over 60 years of age, patients with HIV infection, and patients with diabetes mellitus. Onychomycosis may impact upon physical, functional, psychosocial, and emotional aspects of life. Difficulty walking, wearing shoes, and embarrassment are common complaints. Quantification of such quality-of-life changes are significant to clinical practice in that many factors can affect overall patient health. In light of the potential clinical implications on physical and mental health, onychomycosis should be considered a medical condition that deserves rigorous clinical management. Onychomycosis can be treated effectively and with comparative safety with the new generation of oral antifungal agents (itraconazole, fluconazole and terbinafine). Significantly improved pharmacokinetic and pharmacodynamic profiles permit markedly reduced duration of administration, individual drug exposure, and ultimately enhanced patient compliance and satisfaction with therapy. In addition, a number of pharmacoeconomic studies have documented the cost effectiveness of these newer agents compared with both traditional pharmacologic treatment and topical therapies. The currency figures quoted are 1997 values. With regard to continuous oral antifungal regimens, terbinafine therapy has been found to be most cost effective in the treatment of toenail onychomycosis, with a drug acquisition cost of $US522.50. However, improved safety, tolerability, efficacy and cost effectiveness have been documented with itraconazole intermittent, pulse regimens. With itraconazole pulse therapy, the drug acquisition cost decreases to $US488.90. Additionally, the total cost of medical management is less for itraconazole therapy compared with that of terbinafine ($US261.00 vs $US306.00). Because sensitivity analyses for itraconazole and terbinafine have been found to be somewhat comparable in terms of mycological cure, clinical response, and relapse rates, other variables such as safety and efficacy profiles, and patient attitudes and expectations toward therapy need to be considered when formulating an onychomycosis pharmacologic treatment plan. The drug aquisition cost of fluconazole given as a 300 mg dose once weekly for 6 months is $US562.76 and given as a 150 mg dose once weekly (for 6 months) $US281.38.