True allergic reactions to local anesthetics (LAs) probably make up no more than 1% of all adverse LA reactions. A diagnosis of true potential allergic reactivity is made difficult because (1) the history of the prior reaction may be vague or equivocal and (2) the lack of identification of the actual specific LA hapten-carrier complex limits the potential usefulness of immunologic tests. Nonetheless, since avoidance of LAs may be associated with substantial increased pain or increased risk and because true allergic reactions are rare, investigators and clinicians have used skin testing, incremental challenge, or both as a means of identifying a safe LA for a patient with a history of a prior adverse reaction. Review of the literature dealing with LA skin testing and incremental challenge suggests the following: (1) Skin testing with LAs may correlate with a history of an adverse reaction but may produce systemic adverse reactions, especially with undiluted drug. (2) Although false positive skin tests have been reported, most skin-tested patients who subsequently tolerate an LA have a negative skin test to that drug, and false negative skin tests have not been clearly documented. (3) Incremental challenge beginning with diluted LA is a safe and effective means of identifying a drug that a patient with a history of a prior adverse reaction can tolerate. (4) Current concepts of non-cross-reacting LA groups may be useful in the choice of a drug for use in skin testing and incremental challenge. (5) Preservatives in LAs may account for some but probably not the majority of adverse reactions to LAs. On the basis of this literature review, a practical protocol including dilutional skin testing and incremental challenge is presented for use in evaluating patients with prior adverse reactions to LAs.