Objectives: Oral submucous fibrosis is a common premalignant condition in the Indian subcontinent andis caused by chewing areca nut and other irritants in various forms. Its medical treatment is not yet fullystandardized. In this study we compared the efficacy of Pentoxifylline as compared to placebo. Materials andmethods: 75 patients suffering from oral submucous fibrosis were randomly divided into two groups A and B.Group A patients received placebo, while Group B patients received 400 mg. Pentoxifylline for a period of 7months. Treatment outcome was evaluated on the basis of improvement in symptom and sign scores. Student’s‘t’ test was applied for comparing the results. Results: The improvement in total (i.e. symptoms + sign) scorewas 25% in group A and 49.15% in group B. This difference was found to be statistically significant. (p < 0.05) Conclusion: Treatment regimen of group B was more effective. No significant side effects were seen. A follow upstudy is required to assess long term outcome of this therapy.