Tacrolimus is a nonsteroidal alternative to treat noninfectious otitis externa (OE) in people. This 21-day study investigated whether twice daily application (0.2 mL/dose) of sterile olive oil based 0.1% tacrolimus suspension in ears of atopic beagle dogs without OE was associated with adverse local reactions, development of OE, change in otic cytology, vestibular dysfunction, or hearing loss detected by brainstem auditory evoked response (BAER). The study was randomized, double-blinded, and placebo-controlled. Twenty-two dogs matched for age and sex were randomized to tacrolimus or vehicle control treatment groups. Two investigators independently evaluated dogs for signs of adverse effects including OE the first 4 days of treatment, then every 3 days. A logistic regression model was fit for each investigator's clinical scores (SAS, 9.2, 2008). Time (P = 0.0032) and group (P = 0.0167) were always significant for OE. Inter-observer reliability of clinical scores was strong, measured using Kappa coefficients and proportion of agreement. All nine exclusions (7/10 control- and 2/12 tacrolimus-treated dogs) were excluded for yeast OE. Inter-observer agreement to exclude was 100%. All dogs not excluded had normal BAER assessments before treatment, weekly during treatment, and after 21 days of treatment. None showed vestibular abnormalities at these times. Tacrolimus blood concentrations (Abbott IMx Tacrolimus II) were below detection limits (3 ng/mL) at baseline and after 21 days of treatment. Results suggest otic application of olive oil based tacrolimus suspension to canine ears with intact tympanic membranes is unlikely to result in hearing loss or vestibular dysfunction but yeast OE is a possible risk.