Despite the rapidly falling prevalence of leprosy, the disability and handicap resulting from loss of protective sensation, due to irreversible nerve damage, will remain a huge medical problem for many years. To elucidate the location and consequences of permanent nerve damage in treated leprosy, a prospective study involving nine patients who underwent leg amputation was conducted. Full-length nerves dissected from amputated legs were studied with histological and immunohistochemical methods. Our main findings were that: in both lepromatous and tuberculoid leprosy nerve damage increased distally, culminating in total destruction of dermal nerves and sensory nerve endings; after the therapy-related decrease of inflammation large-scale nerve regeneration took place; and that regenerating axons persisted for decades and in tuberculoid leprosy they might reach the subcutaneous fat of the plantar skin. We conclude that nerve regeneration was blocked by fibrous replacement of the distal-most nerves and nerve endings, and that the theoretical basis of nerve grafting in leprosy is in need of further clarification. In some patients, autologous transplantation of skin flaps, probably irrespective of the duration of loss of sensation, might help in regaining protective sensation.