Recently, drug treatment and percutaneous drainage have been used successfully when treating hepatic hydatid cysts. Until now, there is no published study comparing the relative safety and efficacy of these two forms of treatment. In a prospective study, 33 hepatic hydatid cysts were randomly distributed to receive percutaneous drainage (10), albendazole (10 mg.kg-1.day-1 for 8 weeks) plus percutaneous drainage (12), and albendazole alone (11). Patients were serially assessed by clinical and biochemical examinations, ultrasonography, and hydatid serology. On serial ultrasonography, cysts attained heterogeneous echopattern in 18, uniform echogenicity in 11, and disappearance in 3. All 22 cysts treated with percutaneous drainage and only 2 (18.2%) cysts treated with albendazole alone reduced in size and change in echopattern (P < 0.01). Maximum size reduction was observed in cysts treated with a combination of percutaneous drainage and albendazole (P < 0.05). Complications observed with drainage were cyst infection in 2 patients, fever in 3, cyst biliary rupture in 1, and urticaria in 2. These were managed successfully without any mortality. Three patients who received albendazole developed reversible elevation of liver cell enzymes. It was concluded that percutaneous drainage with albendazole therapy is an effective form of management for hepatic hydatid cysts.