I've never tried it before. But I did find an article comparing the effects of tea tree oil and benzoyl peroxide. After reading this, I feel like I'd give tea tree oil a try.
"A single-blind randomized trial by the Department of Dermatology at the Royal Prince Alfred Hospital in Australia compared the effectiveness and tolerance of 5% tea tree oil gel with 5% benzoyl peroxide lotion in 124 people with mild to moderate acne. People in both groups had a significant reduction in inflamed and non-inflammed acne lesions (open and closed comedones) over the three month period, although tea tree oil was less effective than benzoyl peroxide.
Although the tea tree oil took longer to work initially, there were fewer side effects with tea tree oil. In the benzoyl peroxide group, 79% of people had side effects including itching, stinging, burning, and dryness. Researchers noted that there were far fewer side effects in the tea tree oil group."
For more information you can go to http://altmedicine.about.com/od/teatreeoil/a/teatreeoilacne.htm.