Author summary Undiagnosed crusted scabies patients can be index cases in outbreaks of scabies in residential facilities such as nursing homes and can undermine the success of scabies mass drug administration programs, but literature about this debilitating disease is very limited. The study describes a large cohort of patients with crusted scabies who have been treated according to established local guidelines. While the success of the initial clinical response supports the guideline-based treatment regimen for crusted scabies, with only one patient dying with scabies-related sepsis, the subsequent mortality remains high, reflecting the large burden of comorbidities in the cohort. In addition, there was a high rate of recurrent crusted scabies, attributed to new infection with scabies once the cured patients return to their scabies-endemic communities. Crusted scabies can be successfully treated using robust guidelines including multiple doses of ivermectin together with topical therapy. However, community-based initiatives such as support for 'scabies free zones' are needed to prevent re-infection and recurrent disease in those individuals who are susceptible to developing crusted scabies. Undiagnosed crusted scabies is a threat to the success of scabies mass drug administration programs and will continue to drive scabies outbreaks in residential facilities. Background Scabies is listed as a neglected tropical disease by the World Health Organization. Crusted scabies affects vulnerable and immunosuppressed individuals and is highly contagious because of the enormous number of Sarcoptes scabiei mites present in the hyperkeratotic skin. Undiagnosed and untreated crusted scabies cases can result in outbreaks of scabies in residential facilities and can also undermine the success of scabies mass drug administration programs. Methods and principal findings Crusted scabies became a formally notifiable disease in the Northern Territory of Australia in 2016. We conducted a 2-year prospective study of crusted scabies cases notified between March 2016 and February 2018, with subsequent follow up for 22 months. Demographics, clinical and laboratory data, treatment and outcomes were analysed, with cases classified by severity of disease. Over the 2-year study period, 80 patients had 92 episodes of crusted scabies; 35 (38%) were Grade 1 crusted scabies, 36 (39%) Grade 2 and 21 (23%) Grade 3. Median age was 47 years, 47 (59%) were female, 76 (95%) Indigenous Australians and 57 (71%) from remote Indigenous communities. Half the patients were diabetic and 18 (23%) were on dialysis for end-stage kidney failure. Thirteen (16%) patients had no comorbidities, and these were more likely to have Grade 3 disease. Eosinophilia was present in 60% and high immunoglobulin E in 94%. Bacteremia occurred in 11 episodes resulting in one fatality with methicillin-susceptible Staphylococcus aureus bacteremia. Two other deaths occurred during admission and 10 others died subsequent to discharge consequent to comorbidities. Treatment generally followed the recommended guidelines, with 3, 5 or 7 doses of oral ivermectin depending on the documented grade of crusted scabies, together with daily alternating topical scabicides and topical keratolytic cream. While response to this therapy was usually excellent, there were 33 episodes of recurrent crusted scabies with the majority attributed to new infection subsequent to return to a scabies-endemic community. Conclusions Crusted scabies can be successfully treated with aggressive guideline-based therapy, but high mortality remains from underlying comorbidities. Reinfection on return to community is common while scabies remains endemic.