BACKGROUND: Infestation with the human head louse (Pediculus humanus capitis) occurs worldwide. Existing treatment options are limited, and reports of resistance to commonly used pediculicides have been increasing. In this trial we assessed the efficacy of a product containing a high (92%) concentration of the silicone oil dimeticone (identical in composition to NYDA(R)), as compared to a 1% permethrin lotion. METHODS: Randomized, controlled, observer blinded clinical trial. Participants were recruited from a poor urban neighbourhood in Brazil where pediculosis capitis was highly prevalent. To minimize reinfestation during the trial, participants (145 children aged 5-15 years with head lice infestations) were transferred to a holiday resort outside the endemic area for a period of 9 days. Two applications of dimeticone or 1% permethrin were done, seven days apart. Outcome measures were defined as cure (absence of vital head lice) after first application and before and after second applications, degree of itching, cosmetic acceptability, and clinical pathology. RESULTS: Overall cure rates were: day 2 - dimeticone 94.5% (95% CI: 86.6% - 98.5%) and permethrin 66.7% (95% CI: 54.6% - 77.3%; p < 0.0001); day 7 - dimeticone 64.4% (95% CI: 53.3% - 75.3%) and permethrin 59.7% (95% CI: 47.5% - 71.1%; p = 0.5); day 9 - dimeticone 97.2% (95% CI: 90.3% - 99.7%) and permethrin 67.6% (95% CI: 55.4%-78.2%); p < 0.0001). Itching was reduced similarly in both groups. Cosmetic acceptability was significantly better in the dimeticone group as compared to the permethrin group (p = 0.01). Two mild product-related incidents occurred in the dimeticone group. CONCLUSION: The dimeticone product is a safe and highly efficacious pediculicide. Due to its physical mode of action (interruption of the lice's oxygen supply of the central nervous system), development of resistance is unlikely. TRIAL REGISTRATION: Current Controlled Trials ISRCTN15117709.