• Efficacy assessed by mycological cure (negative culture and negative KOH microscopy) and clinical efficacy (less than or equal to 10% residual disease involvement) at the end of study after treating patients for 24 or 48 weeks. [ Time Frame: 52 weeks ] [ Designated as safety issue: No ]
• Safety assessed by adverse events, serious adverse events, hematology and chemistry. [ Time Frame: 52 weeks ] [ Designated as safety issue: Yes ]

• Efficacy assessed by mycological cure (negative culture and negative KOH microscopy) and clinical efficacy (less than 10% residual disease involvement) at the end of study after treating patients for 24 or 48 weeks.
• Safety assessed by adverse events.

This study is designed to assess the efficacy, safety and tolerability of a topical formulation of terbinafine solution applied daily in patients with toenail fungus. This trial will study patients with mild to moderate toenail fungus disease of the big toenail and their responses to two treatment durations, 24 or 48 weeks.

• Drug: terbinafine
• Drug: Placebo

• Experimental: Active terbinafine hydrochloride (HCl) 10 % Nail Solution for Onychomycosis (NSO) for 48 weeks
• Placebo Comparator: vehicle (placebo) for 48 weeks
• Experimental: Active terbinafine hydrochloride (HCl) 10 % Nail Solution for Onychomycosis (NSO) for 24 weeks
• Placebo Comparator: vehicle (placebo) for 24 weeks

Inclusion Criteria:

• Male and females 12 - 75 years of age
• Fungal toenail infection of one or both of the large (great) toenails
• The nail infection must be due to a dermatophyte, (mixed infections [dermatophyte and non-dermatophyte] are not allowed)

Exclusion Criteria:

• Target foot must not have severe plantar (moccasin) tinea pedis that would require systemic therapy. Mild to moderate tinea pedis (athlete's foot) infection should be treated with terbinifine prior to baseline or at any time during the trial. Other topical treatments for athlete's foot may be recommended at the discretion of the investigator.
• Subjects must not have abnormalities of the nail that could prevent a normal appearing nail if clearing of infection is achieved
• No administration of systemic antifungal medications within 6 months prior to screening visit
• No application of prescription topical antifungal medications for toenail fungus within 3 months or other commercially available topical medications for toenail fungus applied directly to the toenails within 1 month prior to screening visit
• No professional pedicures or application of any nail polish product or nail cosmetic to the toenails after the screening visit
• Known pregnancy or lactation at time of enrollment

Other protocol-defined inclusion/exclusion criteria may apply