OBJECTIVE Review evidence for possible physiologic mechanisms by which local anesthetics cause nerve injury was reviewed. METHODS Published clinical case reports, and both in vivo and in vitro experimental studies in animals, were reviewed. Reports with direct bearing on possible mechanisms of local anesthetic neurotoxicity were included. RESULTS There is basic and clinical evidence that local anesthetics can cause nerve injury. Nerve injury may result from direct toxicity to the axon or Schwann cell, or may be secondary to disruption of the nerve microenvironment. Although each of these possibilities is supported by published experiments, injury to the axon is the most likely explanation for persistent neurologic deficits, such as those believed to result from clinical use of local anesthetics. Whether the injury is direct or indirect, and the precise mechanism by which it occurs, has received only limited study. CONCLUSIONS In rare instances, the clinical use of local anesthetics is associated with neurologic morbidity. The physiologic mechanisms of toxicity for which there is the best evidence are inhibition of fast axonal transport, disruption of the axonal cytoskeleton, axonal degeneration, and ischemic nerve injury. The effects of local anesthetics on nerve blood flow may be related to inhibition of endothelium-dependent vasodilation or interruption of the synthesis of vasodilating prostaglandins. Both the prevention and the treatment of nerve injury caused by local anesthetics requires information that is not yet available about the physiologic and molecular mechanisms for direct neural toxicity of local anesthetics.