A randomized, double-blind, placebo-controlled trial of P07P, a product derived from a traditional Chinese herbal remedy, was undertaken in 50 dogs with atopic dermatitis. Owners recorded a daily itch score for 4–14 days before treatment and during treatment. Packets of powder containing P07P or placebo were added to the food once daily for 8 weeks. Dogs were assessed for erythema, surface damage, overall coat condition and seborrhoea by the same investigator, as well as for pruritus and general demeanour, at 0 (visit 2), 28 (visit 3) and 56 (visit 4) days of treatment or at withdrawal. Investigator and owner assessments of response were recorded after 28 and 56 days of treatment or at withdrawal. The predefined primary outcome measure was the owners’ assessment of response at the end of treatment. Nine of the 24 dogs (37.5%) in the P07P group but only 3 of the 23 dogs (13%) in the placebo group were considered to have improved, but this difference was not statistically significant (P = 0.09). There was a significantly higher withdrawal rate due to worsening of condition in the placebo group (P = 0.04). Mean daily itch score in the second 28-day period of the study was significantly higher than baseline in the placebo group (P = 0.01) but not in the P07P group (P = 0.30). Pruritus scores showed a significant deterioration from baseline at the final visit in the placebo group (P = 0.01) but not in the P07P group (P = 1.00). There was a significant difference between the groups in change from baseline in erythema score at visit 3 (P = 0.05). There were no significant differences (P > 0.05) in surface damage, seborrhoea, overall coat condition and general demeanour scores within or between the groups throughout the study. The product was well tolerated with no severe or serious adverse events recorded. P07P may be beneficial as a novel nonsteroidal therapy for the management of dogs with atopic dermatitis.