Background: Physiological phimosis, a common complaint in the pediatric surgery outpatient department presenting as non-retractile foreskin is due to adhesions between the inner layer of the prepuce with glans penis or due to tight tip of the prepuce. These patients are managed with circumcision, preputial dilatation. In this study, we compare different outcomes measures in children treated with dilatation and those with application of Neosporin-hydrocortisone ointment.Methods: This prospective comparative study was conducted in the department of pediatric surgery outpatient department between 2015 and 2017. We followed up 50 patients who underwent only dilatation and other 66 patients who were advised to apply only hydrocortisone impregnated antibiotic cream twice daily over a period of six weeks. We recorded basic demographic features, parent anxiety, parental compliance, parent satisfaction, complete response and persistence of phimosis at the end of the treatment. All statistical tests were done using R statistical software.Results: Of the 116 children recruited to the study, 50(43%) belonged in the dilatation group and rest (66%) to the Neosporin-hydrocortisone (NH) group. The median age of the patients was 36 with inter-quartile range (23-48) months. Baseline characteristics were comparable across the groups. At the end of six weeks, there was statistically significant difference between the two groups with regard to all outcome measures namely parent compliance, parent satisfaction, symptom resolution with the NH group showing a better result (P value<0.0001). Moreover, Phimosis persisted in 18 (36%) of the patients treated with dilatation compared to 4 (6%) in Neosporin hydrocortisone ointment group which was statistically significant.Conclusions: Present study shows that local application of Neosporin-hydrocortisone ointment is a better alternative to using the painful preputial dilatation in children with phimosis.