Atopic dermatitis (AD) is a common chronic skin disease, which mainly affects children. Xerosis is one of the most troublesome signs of the disease. The aim of this study was to evaluate the efficacy of liquid soap containing 12% ammonium lactate + 20% urea in patients with AD. In a randomized, double-blind study, 36 patients (both male and female patients; age range 3–40 years) with mild to moderate AD were enrolled. Patients were divided randomly into two groups, in a ratio of 2 : 1 (active : placebo). The prescribed soap was used on a daily basis during a shower for 3 weeks. All patients continued all other systemic or topical medication but avoided any other soap or emollients. After 3 weeks of treatment, efficacy was assessed both by clinician and patient. There were significant improvements in scaling (P < 0.0001), skin dryness (P < 0.0001) and redness (P = 0.03) as rated by the investigator, and subjective patient assessment of itch also improved (P < 0.001) in the study group compared with the control group. The liquid soap was found to be effective in patients with AD, as use of this soap in patients with stable mild to moderate AD improved the parameters studied.