Multidrug therapy (MDT), according to the recommendations of a WHO Study Group of 1982, was introduced in the leprosy control program of the All African Leprosy and Rehabilitation Training Center (ALERT), Ethiopia, in January 1983. Paucibacillary (PB) patients are treated with 6 months of MDT. Multibacillary (MB) patients are treated with at least 2 years of MDT and until skin-smear negativity. An analysis was made of the relapses which had been diagnosed among self-reporting patients in four rural districts and Addis Ababa. Among 3065 PB patients, 34 relapses (1.1%) were diagnosed during an average period of 6.1 years after stopping MDT (range 2 1/2 to 7 1/2 years). Among 2379 MB patients, 24 relapses (1.0%) were diagnosed during an average period of 4.7 years after stopping MDT (range 2 1/2 to 6 years). The estimated relapse rate per 1000 patient-years after release from MDT was 2.1 for PB patients and 2.4 for MB patients. From the analysis of the clinical, bacteriological, and histopathological findings, it was concluded that there was strong positive evidence for the diagnosis for 16 of the 34 relapses in the PB patients and for 0 of the 24 relapses in the MB patients. The main cause for overdiagnosis of MB relapses was that too much reliance had been put on skin-smear results, without a careful comparison of the results with those from before, during, and at completion of MDT; the diagnosis was based on the finding of positive smears in one set of smears only; insufficient attention was given to finding solid-staining bacilli; and findings in biopsies, if these were examined, did not confirm the diagnosis. The main cause of overdiagnosis of PB relapses was that too much reliance was put on histological findings, while these are often inconclusive for differentiating between a relapse and late reversal reaction. Recommendations are made on how to limit overdiagnosis of relapses. Operational procedures and criteria for making the diagnosis under conditions where facilities for back-up histological and mouse foot pad investigations are not available are proposed.