Tea Tree oil (TTO), based on contemporary data, clearly shows the broad spectrum activity of TTO including antibacterial, antifungal, antiviral and anti-protozoan activities.    

(Clinical Microbiology Reviews Jan 2006.)

The chemicals in tea tree oil may kill bacteria and fungus and are known to reduce allergic skin reactions. Experts believe the most beneficial component of tea tree oil is its high terpene content. According to Dr. Aurora DeJuliis, a dermatologist and aesthetician based in New Jersey, terpenes are a type of volatile oil that has been shown to destroy bacteria.

However, I advise you to use tea tree oil with caution – it's meant to be used topically.  Using tea tree oil at full strength can cause skin irritation, which is why it is often diluted with other natural ingredients, like raw honey or coconut oil.  Tea tree oil is safe as long as it is applied topically in appropriate doses and NOT swallowed. This oil may irritate your skin, especially if used for the first time.

Web MD Tea Tree Profile