Chemical peeling with 88% phenol was carried out on 142 sites of stable vitiligo (hairy-126, non hairy-16) and on 69 sites of alopecia areata (AA). After cleansing and defatting, phenol was applied on affected areas till a uniform frost appeared. On healing, all the lesions of vitiligo showed perifollicular pigmentation in hairy areas and perilesional repigmentation in non hairy areas. These were further treated with PUVA/PUVASOL. After the healing, 82.5% of hairy sites and 81.3% of non hairy sites showed repigmentation. In cases of AA, patients developed vellus hair. In AA, 72.5% had good regrowth and 27.5% had poor response. Side effects seen were hypopigmentation (58 AA), hyperpigmentation (11 AA), persistent erythema (42 vitiligo, 28 AA), demarcation lines (4 AA), secondary bacterial infection (2 vitiligo, 5 AA) and superficial scarring (2 vitiligo, 7 AA). The wounding action of phenol is useful to repigment the vitiligo patches and for induction of regrwoth of hair in alopecia areata.