Background Direct ophthalmoscopy is an essential skill that students struggle to learn. A novel 'teaching ophthalmoscope' has been developed that allows a third person to observe the user's view of the fundus. Objectives To evaluate the potential use of this device as an aid to learning, and as a tool for objective assessment of competence. Methods Participants were randomised to be taught fundoscopy either with a conventional direct ophthalmoscope (control) or with the teaching device (intervention). Following this teaching session, participant competence was assessed within two separate objective structured clinical examination (OSCE) stations: the first with the conventional ophthalmoscope and the second with the teaching device. Each station was marked by two independent masked examiners. Students were also asked to rate their own confidence in fundoscopy on a scale of 1-10. Scores of competence and confidence were compared between groups. The agreement between examiners was used as a marker for inter-rater reliability and compared between the two OSCE stations. Results Fifty-five medical students participated. The intervention group scored significantly better than controls on station 2 (19.8 vs 17.6; P = 0.01). They reported significantly greater levels of confidence in fundoscopy (7.3 vs 4.9; Po0.001). Independent examiner scores showed significantly improved agreement when using the teaching device during assessment of competence, compared to the conventional ophthalmoscope (r = 0.90 vs 0.67; Po0.001). Conclusion The teaching ophthalmoscope is associated with improved confidence and objective measures of competence, when compared with a conventional direct ophthalmoscope. Used to assess competence,