Objective To explore the application effect of tea tree oil on neonatal red buttocks. Methods From January 2018 to May 2019, 200 neonates with red buttocks in our hospital were selected as the research objects, they were divided into the control group and the observation group according to the random number table method, with 100 cases in each group. The control group used traditional method to wash the newborn′s buttocks with warm water, keep them clean and dry and apply Zinc Oxide Ointment locally; the observation group used warm water to wash the newborn′s buttocks, keep them clean and dry and apply tea tree oil locally. The red buttocks disappearance time, intervention effectiveness and skin lesion score of the two groups of newborns were compared and analyzed. Results After the end of 1 week of intervention, the total effective rate in the observation group was higher than that in the control group, the difference was statistically significant (P<0.05). The time to fade of mild, moderate and severe red buttocks in the observation group was shorter than that in the control group, the differences were statistically significant (P<0.05). There was no significant difference in skin lesion scores between the two groups before intervention (P>0.05); after the end of 1 week of intervention, the skin lesion scores in the two groups were lower than those before intervention, and the observation group was lower than that in the control group, the differences were statistically significant (P<0.05). Conclusion The use of tea tree oil in neonatal red buttocks has a better effect and can effectively improve the clinical efficacy of neonatal red buttocks, shorten the time for the regression of mild, moderate and severe red buttocks, and reduce the score of buttocks.