Background: Pain and pruritus are two common symptoms in dermatology that are transmitted with unmyelinated C fibers via substance P. Topical capsaicin is effective due to depletion of never endings from substance P. Objective: The efficacy and side effects capsaicin gel in painful and pruritic skin disorders was compared to placebo. Patients and Methods: In a controlled clinical trial, 40 patients (21 patients with post-herpetic neuralgia, 10 with lichen simplex chronicus, and 9 with notalgia paresthetica), with the mean age of 48 years were randomly treated with 0.075% capsaicin gel or placebo q.i.d. for 4 weeks. The severity of symptoms and side effects were assessed every two weeks and recurrence was assessed also two months after treatment. Results: 31 cases (77%) completed their 4 weeks treatment period. According to visual Analogue Score system, the mean of symptom severity decreased from 7.6 (±2.4) before treatment to 0.9 (±0.9) after treatment in capsaicin group and decreased from 6.3 (±2.3) to 5.0 (±3.2) in placebo group (P<0.05). Conclusion: Capsaicin gel is effective in painful and pruritic skin disorders and has tolerable side effects.