What is terbinafine (Lamisil)? Terbinafine is an antifungal antibiotic. Terbinafine is used to treat infections caused by fungus that affect the fingernails or toenails. Terbinafine oral granules are used to treat a fungal infection of scalp hair follicles in children who are at least 4 years old. Terbinafine may also be used for purposes not listed in this medication guide.