Tea tree oil, derived from the leaves of the Melaleuca alternifolia tree, is a potent antifungal agent. Its natural compounds, such as terpinen-4-ol, have been found to combat various fungal infections, including ringworm. To use tea tree oil as a home remedy for ringworm, dilute a few drops in a carrier oil like coconut oil and apply it directly to the affected area using a clean cotton ball.