Simultaneous biopsies of the skin and a cutaneous nerve were done in 36 randomly selected leprosy patients and the histopathological features of the lesion in the two tissues were compared. A discrepancy was noticed in 21 instances. In 19 of these cases the lesions in the nerve were found to be immunologically more deficient and were also bacillated, even when the skin lesion had cleared or regressed. The implications of the findings are discussed and the need for further studies is emphasized.