The present study was undertaken to compare the efficacy and safety of thalidomide to that of oral prednisolone in the treatment of moderate to severe type 2 lepra reaction. Sixty patients with a histologically confirmed diagnosis of erythema nodosum leprosum with a clinical score of 4 or more (i.e. moderate to severe type 2 reaction) were randomly allocated to two groups comprising 30 patients each. Group 1 patients were given thalidomide at a dose of 300 mg/day for 1 week and the dose was gradually reduced, and Group 2 received prednisolone 40 mg daily for 2 weeks, which was tapered by 10 mg every 2 weeks. Thalidomide induced a faster clinical response (cutaneous as well as systemic) compared with prednisolone. Patients taking thalidomide had fewer relapses and a longer period of remission than those receiving prednisolone.