Lepromatous leprosy is characterized by a selective anergy to Mycobacterium leprae and its antigens. The inadequate immune response and the resulting reduced interferon-gamma (IFN-gamma) production lead to a lack of macrophage activation and unrestricted bacterial growth. Purified protein derivative of tuberculin induced a normal local immune response in many lepromatous leprosy patients. Interleukin-2 induced an accelerated equivalent of an antigen response in the skin. In both, monocytes and T cells were recruited, and changes in keratinocytes, including expression of major histocompatibility complex class II antigens, were induced. Skin macrophages appeared to be activated and bacteria were eliminated. Similar effects were generated by IFN-gamma, a more distal molecule in the immune response. Cytokine treatment induced large amounts of tumor necrosis factor-alpha, which is toxic in this context but can be selectively down-regulated by thalidomide without interfering with other monocyte cytokines necessary for normal immune function.