Infection with Echinococcus granulosus is endemic in Middle Eastern countries. Some patients are noted to undergo spontaneous resolution, but many require surgical removal with its associated risks. Although, there are studies showing favourable responses to medical treatment, there is no controlled study on the effect of albendazole. In this study, 20 patients with 179 E. granulosus cysts affecting the lungs were entered into a triple blind parallel randomized clinical trial comparing the effects of albendazole versus placebo. Fifteen patients (150 cysts) completed 6 months of treatment; four patients (26 cysts) were in the placebo group and 11 patients (124 cysts) in the treatment group receiving 800 mg albendazole daily in three cycles of 6 weeks with 2 weeks between cycles. Ten of 11 patients (91%) in the treatment group showed either cure (five patients) or improvement (five patients); in the placebo group, only one of four (25%) showed spontaneous improvement but no cure. In the treatment group, 88 of 124 cysts (71%) showed improvement compared to four of 26 (15.4%) in the placebo group (p=0.000). Complication from therapy was insignificant; one case had recurrent disease, which responded to further therapy. It is suggested that patients suffering from uncomplicated hydatid disease should be given a trial of albendazole before surgery is considered.