Also known as melaleuca, from the name of its native Australian plant source, Melaleuca alternifolia. It can have disinfecting properties that have been shown to be effective against the bacteria that cause acne. Tea tree oil also has anti-inflammatory properties and is an antioxidant (Source: International Journal of Dermatology, July 2013, pages 784-790).
Tea tree oil has some interesting research demonstrating it to be an effective antimicrobial agent. The Journal of Applied Microbiology (January 2000, pages 170–175) stated that "The essential oil of Melaleuca alternifolia (tea tree) exhibits broad-spectrum antimicrobial activity. Its mode of action against the Gram-negative bacterium Escherichia coli AG100, the Gram-positive bacterium Staphylococcus aureus NCTC 8325, and the yeast Candida albicans has been investigated using a range of methods... . The ability of tea tree oil to disrupt the permeability barrier of cell membrane structures and the accompanying loss of chemiosmotic control is the most likely source of its lethal action at minimum inhibitory levels." In addition, "In a randomized, placebo-controlled pilot study of tea tree oil in the treatment of herpes cold sores, tea tree oil was found to have similar degree of activity as 5% acyclovir" (Source: Journal of Antimicrobial Chemotherapy, May 2001, page 450).
For acne there is also some credible published information showing it to be effective as a topical disinfectant for killing the bacteria that can cause pimples (Source: Letters in Applied Microbiology, October 1995, pages 242–245). However, the crux of the matter for tea tree oil is: How much is needed to have an effect? The Medical Journal of Australia (October 1990, pages 455–458) compared the efficacy of tea tree oil to the efficacy of benzoyl peroxide for the treatment of acne. A study of 119 patients using 5% tea tree oil in a gel base versus 5% benzoyl peroxide lotion was discussed. There were 61subjects in the benzoyl peroxide group and 58 in the tea tree oil group. The conclusion was that "both treatments were effective in reducing the number of inflamed lesions throughout the trial, with a significantly better result for benzoyl peroxide when compared to the tea tree oil. Skin oiliness was lessened significantly in the benzoyl peroxide group versus the tea tree oil group." However, while the reduction of breakouts was greater for the benzoyl peroxide group, the side effects of dryness, stinging, and burning were also greater—"79% of the benzoyl peroxide group versus 49% of the tea tree oil group." For acne, tea tree oil concentrations of 5% to 10% are recommended. However, the amount present in most skin-care products is usually less than 1% and, therefore, considered not effective for disinfecting. Note that tea tree oil is a fragrant oil whose volatile components of limonene and eucalyptol can cause contact dermatitis upon exposure to oxygen. Careful use and storage of tea tree oil is advised. Additional sources for the information above: Phytomedicine, April 2010, pages 317–322; Dermatitis, May-June 2009, pages 149–160; Journal of Toxicology and Environmental Health, Volume 71, 2008, pages 965–968; Indian Journal of Dermatology, Venereology, and Leprology, January-February 2007, pages 22–25; Clinical Microbiology Reviews, January 2006, pages 50–62; and Food and Chemical Toxicology, October 2005, Epublication).