The ALERT MDT Field Evaluation Study (AMFES) began in 1988 and followed patients prospectively for up to 10 years after release from treatment (RFT). This paper presents the findings from this cohort with regard to neuropathy and nerve damage. Five hundred and ninety-four new cases of leprosy are included in the study, 300 multibacillary (MB) and 294 paucibacillary (PB) cases. Fifty-five percent of patients had some degree of impairment at diagnosis and a further 73 (12%) developed new nerve function impairment (NFI) after starting multiple drug therapy (MDT). The overall incidence rate for neuropathy was 39 episodes per 100 PYAR in the first year after diagnosis, gradually declining to 12 episodes per 100 PYAR in the sixth year. In those patients without impairment at diagnosis, the incidence rate of neuropathy was 25 episodes per 100 PYAR for MB cases and 11 per 100 PYAR for PB cases in the first year; in 33% of MB cases whose first episode of neuropathy occurred after diagnosis, that first episode took place after the first year, or after the normal period of treatment with MDT. Seventy-three patients with neuropathy developing after diagnosis are reported more fully: 34 (47%) had only one nerve involved and of these 25 (73%) had a single, acute episode of neuropathy. Nine (27%) had further episodes. Thirty-nine (53%) had more than one nerve involved and of these 16 (41%) had a single, acute episode, while 23 (59%) had further episodes. The terms 'chronic' and 'recurrent' neuropathy are defined and used to describe the pattern of neuropathy in those with repeated attacks. In patients with no impairment at the start of the study, treatment with steroids resulted in full recovery in 88% of nerves with acute neuropathy but only 51% of those with chronic or recurrent neuropathy. The median time to full recovery from acute neuropathy was approximately 6 months, but in a few cases recovery occurred gradually over 2-3 years. Severe neuropathy was less likely to be followed by a complete recovery than mild or moderate neuropathy. Forty-two percent of nerves with acute neuropathy that were not treated with steroids also fully recovered. In the group of patients who were thought to have old, permanent impairments at diagnosis, full recovery of nerve function occurred in 87/374 (23%) of the nerves involved. The overall outcome is illustrated by examining the average EHF score for groups of patients. Patients with no new neuropathy after diagnosis show a gradual improvement in their EHF score, while those with any episodes of neuropathy after diagnosis show a gradual deterioration after completion of MDT. Possible explanations for these findings are discussed. Risk factors for neuropathy, for chronic and recurrent neuropathy, and for a poor outcome 5 years after release from treatment, are examined. Impairment at diagnosis was the main risk factor for a poor outcome, accompanied by the occurrence of chronic/recurrent neuropathy or a reversal reaction.