The endemic treponematosis yaws remains a significant cause of morbidity in many tropical countries, despite mass treatment campaigns to eradicate it. An outbreak of yaws in Marup village on Karkar Island, Papua New Guinea in 1988 provided an opportunity to monitor the outcome of treatment with penicillin over an extended period. Thirty-nine children with clinical yaws (6% of 632 examined) were monitored clinically and serologically, for nearly two years after mass treatment of all villagers with the World Health Organization recommended dosages of benzathine penicillin. Lesions resolved within one month of treatment in all but four (10%) children, three of whom were initially successfully retreated. Before treatment, the Venereal Disease Research Laboratory (VDRL) test result was reactive in 67% of the children and treponema-specific IgM antibody test results were reactive in 41%. Within six months of treatment, of those reactive, the VDRL titer decreased significantly in 25 (96%) of 26 and IgM antibody test results became negative in 13 (81%) of 16 children. However, by the end of follow-up, 11 (28%) of the 39 children had developed clinical and/or serologic evidence of relapse. In these children, response to further treatment was slow and, in three, evidence of active infection persisted or recurred, despite repeated courses. Exogenous reinfection was unlikely in this isolated community, in which the occurrence of yaws was closely monitored after universal treatment. Treatment failure was most likely to have been due to reduced susceptibility to penicillin of Treponema pallidum subsp. pertenue.