According to Ruth Winter, Neem tree leaf extract has been shown to have antibacterial and antiviral activity. The seed oil at 0.3% concentration on agar plates was active against Staph aureus and at 0.4% was active against Salmonella typhosa. The seed oil at concentration of 3.0% on agar plate was active against Klebsiella pneumoniae. Extracts of neem using methanol and butyl methyl ether showed antifungal activity against a number of fungi. (I would love to find her source on this information though.)
According to the editors and researchers at Beautypedia, Neem has potential toxic effects, although it also has been shown to have antimicrobial properties, too. Neem oil is approved as a pesticide in the United States, and they’ve found no reliable research proving neem extract or oil has any benefit for skin in terms of common skin types and concerns, though, says Beautypedia, you can find a fair number of studies on neem’s insecticidal properties for conditions like head lice and scabies. There’s one study showing the seed extract from neem contains compounds that can reduce melanin (skin pigment) formation on isolated animal cells, but as this research was not done on intact human skin presenting with pigment irregularities, we don’t know if the same lightening effect would be seen.
Other sources claim that neem extract and oil has antiseptic and sebum regulating properties.
This oil is very smelly due to a component called nimbidin (it smells like sulfur and garlic) so is only used in very small quantities in skin-care products. Neem is marketed as being great for easing arthritis and sprains, bruises and cuts, and “regenerating” dry and sensitive skin. The Neem leaf can be used for treating eczema and psoriasis.
Both the leaf and the seeds can be harvested from the Tree without causing the tree damage. Due to its insecticidal properties, Neem trees are often the only types of tree left untouched by a plague of locusts.
Neem Extract is highly recommended for cosmetic products where anti-inflammatory, antioxidant, antiseptic, antibacterial, antifungal and antiviral activities are desired, according to one supplier.
Recommended use level in skincare by suppliers: 0.5 – 5%.
Parasitology Research, September 2006, pages 353-356; and Lancet, May 2006, pages 1,767-1,774
Food and Chemical Toxicology, April 1993, pages 297-301
Journal of Oleo Science, November 2009, pages 581-594
A Consumer’s Dictionary of Cosmetic Ingredients, 7th Edition: Complete Information About the Harmful and Desirable Ingredients Found in Cosmetics and Cosmeceuticals