Laboratory-based surveillance of Lyme disease in Connecticut during 1984 and 1985 identified 3,098 persons with suspected Lyme disease; 1,149 were defined as cases. Lyme disease incidence in Connecticut towns ranged from none to 1,407 cases per 100,000 population in 1985. A comparison of 1985 data with data from 1977 epidemiologic studies indicated that incidence increased by 129 percent to 453 percent in towns previously known to be endemic for Lyme disease and that Lyme disease had spread northward into towns thought to be free of Lyme disease in 1977. Children aged five to 14 years had the highest incidence. Of persons with Lyme disease, 83 percent had erythema migrans, 24 percent had arthritis, 8 percent had neurologic sequelae, and 2 percent had cardiac sequelae. The distribution of symptoms was age-dependent: case-persons less than 20 years old were almost twice as likely to have arthritis than older case-persons (35 percent versus 18 percent). Of persons with arthritis, 92 percent of those less than 20 years of age, compared to 68 percent of older persons, did not have antecedent erythema migrans. We conclude that Lyme disease is increasing in incidence and geographic distribution in Connecticut. Of those with Lyme disease, children may be more likely than adults to develop arthritis and have it as their first major disease manifestation.