Clinical differentiation of dermatophyte infection from dystrophic changes due to psoriasis may be challenging. Typically, potassium hydroxide (KOH) preparations, fungal culture, and occasionally, nail unit biopsy specimens are utilized to help differentiate between the two. These tests are often time-consuming and may yield false-negative results. Increasing regulation of the office laboratory has caused some physicians to forgo this testing, which was previously routine. We investigated the utility of routine histologic examination of nail clippings in differentiating onychomycosis from psoriatic onychodystrophy. Twenty-three distal nail clipping specimens (twelve specimens from patients with onychodystrophy of unknown cause and eleven control specimens from nails with known cause) were evaluated by routine histology and periodic acid-Schiff (PAS) staining. Of the dystrophic cases, four were demonstrated to be onychomycosis by the presence of hyphae on histologic evaluation and by culture, whereas only three of these cases yielded positive results on KOH examination. Eight cases of onychodystrophy were due to psoriasis. Yeast forms were detected on one case of psoriatic onychodystrophy that demonstrated yeast growth on culture. In our study, routine histologic examination with PAS staining was equal to culture and superior to KOH preparation in leading to the correct diagnosis of dermatophyte infection. In addition, the diagnosis of psoriasis of the nail plate was detected accurately by routine histologic examination. Routine histologic examination with PAS staining is a rapid, simple, and reliable test in the evaluation of onychodystrophy.