Fungal infections are the most frequent dermatoses. The gold standard treatment for dermatophytosis is the squalene epoxidase (SQLE) inhibitor terbinafine. Pathogenic dermatophytes resistant to terbinafine are an emerging global threat. Here, we determine the proportion of resistant fungal skin infections, analyse the molecular mechanisms of terbinafine resistance, and validate a method for its reliable rapid identification. Between 2013 and 2021, we screened 5634 consecutively isolated Trichophyton for antifungal resistance determined by hyphal growth on Sabouraud dextrose agar medium containing 0.2 μg/mL terbinafine. All Trichophyton isolates with preserved growth capacity in the presence of terbinafine underwent SQLE sequencing. Minimum inhibitory concentrations (MICs) were determined by the broth microdilution method. Over an 8-year period, the proportion of fungal skin infections resistant to terbinafine increased from 0.63% in 2013 to 1.3% in 2021. Our routine phenotypic in vitro screening analysis identified 0.83% (n = 47/5634) of Trichophyton strains with in vitro terbinafine resistance. Molecular screening detected a mutation in the SQLE in all cases. Mutations L393F, L393S, F397L, F397I, F397V, Q408K, F415I, F415S, F415V, H440Y, or A398 A399 G400 deletion were detected in Trichophyton rubrum. Mutations L393F and F397L were the most frequent. In contrast, all mutations detected in T. mentagrophytes/T. interdigitale complex strains were F397L, except for one strain with L393S. All 47 strains featured significantly higher MICs than terbinafine-sensitive controls. The mutation-related range of MICs varied between 0.004 and 16.0 μg/mL, with MIC as low as 0.015 μg/mL conferring clinical resistance to standard terbinafine dosing. Based on our data, we propose MIC of 0.015 μg/mL as a minimum breakpoint for predicting clinically relevant terbinafine treatment failure to standard oral dosing for dermatophyte infections. We further propose growth on Sabouraud dextrose agar medium containing 0.2 μg/mL terbinafine and SQLE sequencing as fungal sporulation-independent methods for rapid and reliable detection of terbinafine resistance.