Topical cantharidin is a commonly used treatment for molluscum contagiosum (MC). However, studies validating its safety and efficacy are limited. We conducted a 6-week, randomized, double-blind, placebo-controlled trial with subsequent open-label extension to assess the safety and effectiveness of cantharidin in treating pediatric MC. Ninety-four participants with MC were randomized to receive cantharidin or placebo, with or without occlusion. The primary outcome was complete lesion clearance. Secondary outcomes included post-treatment lesion count, adverse events, and side effects. No significant differences between the study arms, including baseline lesion count, were observed. The overall mean (SD) baseline lesion count was 22.2 (12.9). The number of participants achieving total clearance is as follows: 7/23 (30.4%) in the cantharidin only arm, 10/24 (41.7%) in the cantharidin with occlusion arm, 2/25 (8.0%) in the placebo with occlusion arm, and 3/22 (13.6%) in the placebo only arm. Post hoc analysis demonstrated that 17/47 (36.2%) participants in the combined cantharidin arms achieved clearance compared to 5/47 (10.6%) in the placebo arms (P = 0.0065). The mean (SD) lesion count change from baseline was -5.1 (12.2) in the placebo only arm; the mean change (SD) was -17.4 (12.8) in the cantharidin only arm (P = 0.0033) and -15.9 (11.6) in the cantharidin with occlusion arm (P = 0.0101). No serious adverse events or side effects were observed. Topical cantharidin was well-tolerated and associated with the resolution of MC.