Background: Alopecia areata is a common auto-immune condition, characterized by circumscribed, patches of hair loss usually of the scalp. There are various treatment modalities available but no treatment is fully curative or preventive. Also, alopecia areata can have devastating effects on the patient’s quality of life and self-esteem. The aim of this study was to determine dermoscopy findings of alopecia areata that could be used as a clinical indicator of disease and also to evaluate the efficacy of intralesional injection Triamcinolone acetonide in the treatment of alopecia areata.Methods: Seventy patients with alopecia areata, aged between 11 and 56 years were injected with intralesional triamcinolone acetonide at a 4 weeks interval. Treatment response was evaluated using re-growth scale approach. Dermlite DL3 dermoscope was used to assess disease activity, response to treatment and side effects. Using Wilcoxon signed rank test, changes were assessed in the severity of the disease during follow-ups.Results: Baseline mean percentage area of scalp involved was 23.21±10.70. All the patients had black dots, 98.6% had yellow dots, 27.1% had broken hair, 74.3% had tapering hair and only 71.4% had vellus hair. At baseline, 15 (21.4%) patients had Alopecia Grading Score (AGS) 1, 29 (41.4%) had score 2 and 26 (37.1%) had a score of 3. Injection Triamcinolone acetonide (5 mg/ml) was injected at 1 cm intervals with 0.1 ml on each site and the procedure was repeated every 4 weeks for a maximum period of 24 weeks. From baseline level to the last follow up, proportion of patients with black dots reduced from 100% to 4.3%, yellow dots from 98.6% to 0%, broken hair from 17% to 0% and tapering hair from 74.3% to 0%. Vellus hair increased from 71.4% to 100%. Overall success rate in terms of achievement of re-growth Ssore 4 at last follow up was 60%.Conclusions: Dermoscopic characteristics, such as black dots, yellow dots, broken hair, tapering hair and clustered short vellus hair are primary indicators of alopecia areata.