Purpose: Due to growing nuclear nature of urban families, pets like dogs are becoming popular companions. A skin disorder is common in dogs and is a concern for human coming in contact. Natural remedies need to be assessed for long term safety of dogs and humans. There is evidence that in dogs, Neem oil can help with fleas, ticks, intestinal parasites and mange mites. According to Ayurvedic medicine. Neem oil improves the clinical signs of skin disorders. To study its action in canines, further work was required on the efficacy of Neem oil in the treatment of canine atopy. Method: Effect of a preparation of Neem oil on canine atopy was assessed in a open, placebo-controlled trial. Privately owned dogs were used and the clinical signs of atopic dermatitis were evaluated by the owners. For a period of 3 weeks, the dogs daily received application with Neem oil (n = 9) or vehicle (n = 8). During the trial, all dogs were cleaned with the use of regular bathing shampoo in order to maintain hygiene. To assess the severity of atopic dermatitis, the clinical signs scored were itching, redness, scaling, thickening and stripping of skin. The severity of the signs of atopic dermatitis was scored by the owners by marking with a cross a 10-cm, horizontal line. Result: For all five clinical signs, the group-mean improvement, expressed as change of severity score over time, was greater in the test group than in the controls. Within each group, the changes for the five clinical signs were added up to arrive at an overall index of improvement of atopic dermatitis. The extra improvement caused by the application of Neem oil was significant. Conclusion: Neem oil can be considered as effective and is beneficial for dogs with atopic dermatitis.