Coal tar is applied to the skin to reduce the itching of atopic dermatitis. It is not as strong as a corticosteroid and can be used as a "bridge therapy" from a stronger medication when symptoms have improved. Coal tar may also be used for treatment of thick skin (lichenified) if other treatment is not effective.

Coal tar is available as a gel, cream, or ointment or as a solution for the bath. Examples of coal tar preparations include 5% coal tar in a hydro-alcoholic gel (such as Estar) or 5% liquor carbonis detergens in a cream base.

Coal tar preparations are generally felt to be safe. There have been some concerns of cancer-causing chemicals in coal tar, but the U.S. Food and Drug Administration (FDA) reports that the chemical concentrations in nonprescription coal tar are at safe levels. Use coal tar carefully when the skin rash is inflamed or is near the eyes or in skin folds.