The distinction between persistent infection and immunologic reactions in leprosy is often difficult but critically important since their management is different. We present the case of a 51-year-old Vietnamese female who presented in 2015 with areas of erythema and skin infiltration on face and chest, as well as edema on her hands and feet. Skin biopsy was consistent with lepromatous leprosy. She was treated with rifampin, clarithromycin, and levofloxacin for 2 years. Her lower extremity edema was attributed to type 2 immunological reaction for which she was started on prednisone and methotrexate, but she was lost to follow-up for 19 months. She presented with new skin lesions and pain on her extremities. New biopsies revealed an intense neutrophilic infiltrate in the dermis and acid-fast bacilli focally within cutaneous nerve twigs. As compared with the initial biopsy, the inflammatory infiltrates were diminished and the bacilli had a degenerating appearance. These findings were consistent with type 2 immunological reaction. The patient was treated with thalidomide with improvement in the appearance of the skin lesions. A follow-up biopsy showed lack of neutrophilic infiltrates and decreased number of bacilli. This case illustrates the importance of differentiating between persistent infection and immunologic reactions in leprosy. Clinicians should be aware of these complications. A high index of suspicion and accurate interpretation of skin biopsy results are essential for appropriate diagnosis.