Psoriasis and seborrhoeic dermatitis are common erythematous-squamous dermatoses that may present with scaly erythematous patches on the scalp. Owing to the similar clinicopathological features of these dermatoses, their differentiation poses a diagnostic challenge, particularly when the lesions on the scalp are isolated. To evaluate the usefulness of dermoscopy in the clinical differentiation of scalp psoriasis and seborrhoeic dermatitis. This was a retrospective observational study to evaluate the characteristic dermoscopic features of scalp psoriasis and seborrhoeic dermatitis. The study included a total of 96 patients with lesions; these patients were recruited from two tertiary teaching hospitals in Korea (Pusan National University Hospital and Kyungpook National University Hospital). Among these, 55 patients had scalp psoriasis and 41 patients had seborrhoeic dermatitis. The most significant dermoscopic features of scalp psoriasis were red dots and globules, twisted red loops, and glomerular vessels. In contrast, seborrhoeic dermatitis was characterized by arborizing vessels and atypical red vessels with the absence of red dots and globules. Featureless areas devoid of any particular vascular patterns were also frequently observed in seborrhoeic dermatitis. Dermoscopic findings of red lines and other vascular patterns were not considered useful for differentiation because these were uncommon features in both diseases. Although scales were observed commonly in both diseases, there was no significant difference in the frequency and characteristics of the scales when they were observed using dermoscopy. Our study shows that the investigation of vascular patterns by using dermoscopy can be valuable for the clinical diagnosis and differentiation of scalp psoriasis and seborrhoeic dermatitis. © 2011 The Authors. BJD © 2011 British Association of Dermatologists.