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In this study we used the nickel contact allergy patch (CAP) test to investigate the effect of topical corticosteroids on allergic contact dermatitis (ACD). On day 1, three CAP tests were applied for 48 h on the forearms of 20 female volunteers with a known nickel ACD. CAP of the right forearm contained 5% nickel, and of the left forearm physiological saline. Clinical scoring, transepidermal water loss and skin hydration were measured on day 1 before CAP application, on day 4 (0, 2 and 6 h) after ACD and from days 5 to 8 (0 h). A topical corticosteroid and its vehicle were applied twice daily starting from day 4 on two ACD sites. Transepidermal water loss values were significantly decreased on the topical-corticosteroid-treated sites in the early phase of ACD (day 4, 6 h after the first application) while clinical efficacy showed significant improvement on days 7 and 8. The vehicle was found to improve skin hydration only on day 8. In conclusion the topical corticosteroid improved the skin barrier function in the early inflammatory phase of ACD (day 4, 6 h). The lack of improvement in transepidermal water loss in the later phase of ACD might be accounted for by the secondary effects of the corticosteroid on proliferation and differentiation of keratinocytes.