Background: Melasma is a brown or grayish brown symmetrical facial hyperpigmentation.A number of medicamens can be used for the treatment of this condition. For better results in treating melasma, combination therapy is preferred. The aim of this study was to determine the clinical efficacy and adverse effects of azelaic acid 20% plus hydroquinone 5% versus hydroquinone 5% alone in the management of melasma. Method: This study was performed as a double blind randomized clinical trial. We randomly prescribed two regimes including azelaic acid 20% cream plus hydroquinone 5% or hydroquinone 5% alone once daily for 4 months in 64 patients. Clinical efficacy (with MASI score) and side effects were assessed after one, two and four months of treatment. Result: MASI score reduction was from 9.35 to 2.9 in patients using azelaic acid 20% plus hydroquinone and from 9.58 to 4.02 in patients using hydroquinone 5%. Drug adverse effects, including burning (most frequent), itching, stinging, dryness and erythema, were present in 50% of the participants in the azelaic acid 20% plus hydroquinone group and 35% of the individuals in the hydroquinone 5% group (P= 0.034), but were tolerated by most patients. Conclusion: Both therapeutic regimens showed a remarkable efficacy in the treatment of melasma but azelaic acid 20% plus hydroquinone was more effective with a more rapid onset of therapeutic response. Azelaic acid 20% plus hydroquinone had more side effects although they were slight in most cases.