Background Scabies is an ectoparasitic, highly contagious skin disease caused by a mite called Sarcoptes scabiei. Topical permethrin and oral ivermectin are currently being used and considered to be safe and effective than the previously used agents. Objective To compare the efficacy and safety of oral ivermectin with topical permethrin in treating scabies. Patients and methods It was an interventional (quasi-experimental) study, conducted in out-patient clinic of Dermatology Department, Unit II, Mayo Hospital, Lahore. Hundred patients belonging to either sex and from 2 to 60 years of age were divided into two groups. Oral ivermectin was given to group A in a single dose of 200 µg/kg body weight. Group B was given single application of topical permethrin 5% cream at night on whole body for 12 hours. When there was no cure in two weeks, a 2 nd treatment was given with either drug in their respective group. Investigations were carried out at presentation and at 2 nd week while patients were followed up at 2 nd and 4 th weeks. Results Permethrin showed marginal better efficacy (88.1%) in completely clearing scabietic lesions at fourth week of therapy as compared to ivermectin (79.5%), the difference was insignificant ( p =0.15). Seven patients in ivermectin group had side effects as headache, increase in itching and secondary bacterial infections as compared to permethrin group in which one patient had erythema ( p <0.05). Conclusion Ivermectin is as effective as permethrin in the treatment of scabies when used in two doses over a period of 4 weeks.