While harmful if ingested, tea tree oil works wonders if applied to the skin, including the scalp. If you plan on using tea tree oil, try not to use it in its undiluted form. Always dilute it in some way, either by mixing it with a carrier oil or water, depending on how you plan on applying it.
In addition, discontinue using tea tree oil if you experience symptoms such as skin irritation, redness, and burning, among other side effects. More serious side effects include confusion, lack of muscle control, and decreasing levels of consciousness. If used properly, though, tea tree oil can help with many different conditions listed here.