Peripheral nerve damage is a major complication of reversal (or type-1) reactions in leprosy. The pathogenesis of nerve damage remains largely unresolved, but detailed in situ analyses suggest that type-1 T cells play an important role. Mycobacterium leprae is known to have a remarkable tropism for Schwann cells of the peripheral nerve. Reversal reactions in leprosy are often accompanied by severe and irreversible nerve destruction and are associated with increased cellular immune reactivity against M. leprae. Thus, a likely immunopathogenic mechanism of Schwann cell and nerve damage in leprosy is that infected Schwann cells process and present Ags of M. leprae to Ag-specific, inflammatory type-1 T cells and that these T cells subsequently damage and lyse infected Schwann cells. Thus far it has been difficult to study this directly because of the inability to grow large numbers of human Schwann cells. We now have established long-term human Schwann cell cultures from sural nerves and show that human Schwann cells express MHC class I and II, ICAM-1, and CD80 surface molecules involved in Ag presentation. Human Schwann cells process and present M. leprae, as well as recombinant proteins and peptides to MHC class II-restricted CD4(+) T cells, and are efficiently killed by these activated T cells. These findings elucidate a novel mechanism that is likely involved in the immunopathogenesis of nerve damage in leprosy.