Ringworm is a very contagious "opportunist" that is ugly to look at and can be difficult to get rid of. Ringworm is named for its appearance:
The disease looks like a circular "worm" under the skin that evolves into an open, crusting area that causes hair loss. it is NOT caused by worms. It is a fungal infection of the skin. The types of fungi that cause ringworm are Trichophyton and Microsporum species, with the first being more common in the United States.
The fungi that cause ringworm are opportunistic invaders, which means they can infect small cuts in the skin or compromised skin that is softened by excessive moisture, poor nutrition, insect bites, or a lowered immune system. Their spores are present in the environment all the time, including a horse's hair and skin. When given the right conditions, these fungi can invade.
If invaded, it sometimes causes itching. The infected area may become raised, skin oozing, and then into a crusty area with hair loss.

Most healthy horses with strong immune systems can fight fungal infections on their own over a six-to-eight-week period. Cool, wet or unsanitary conditions promote fungal infections. Also, horses are more susceptible to infection if their immune systems are compromised by poor nutrition, harsh environmental conditions, cramped living quarters, and diseases. For these reasons, fungal infections occur most often in the winter. Other factors such as excessive sweat left on the skin can also allow fungal infections to occur.

Most fungal infections are not very strong and can be cleared up by removing the crusts to expose the fungus underneath and then treating the affected areas with antifungal agents such as Betadine, chlorhexadine, miconazole, or captan. Sunlight and the horse's own immune systems are also key to helping fight a fungal infection.

Chronic infections that can't be killed are always a red flag--they signify that there is some other internal problem that is lowering the horse's immune system.

Since fungi are very contagious, brushes, tack and blankets should be disinfected with a diluted bleach solution.

Note people with lower immune systems are much more susceptible to fungal infections and shouldn't be handling infected horses.
This article written here with permission from Horse Illustrated, May 2003.