AIM: To describe the Health and Demographic Surveillance System (HDSS) in León, Nicaragua and to present results from the 2002-2003 baseline. DESIGN AND METHODS: A 22% sample of the total population in León, both urban and rural, was selected in 1993. This sample was updated in 2002 and will be followed up on a biannual basis with regard to births, deaths, in-migration, and out-migration. A group of 18 female fieldworkers perform 10 household interviews per day, 20 days per month. They use a map that is produced by a Geographical Information System. It shows all the households, and is the main means of the interviewers finding the households. An extensive data quality control system is used. RESULTS: In total, 54,647 persons lived in the area of the surveillance system, and they resided in 10,994 households. The mean age was 26 years; the sex ratio was 0.93. The infant and neonatal mortality rates were 25.4 and 20.5 per 1,000 live births, respectively. In total, 2,034 people out-migrated from the study area and 3,377 in-migrated. Of the households, 53% were classified as non-poor, 41% as poor, and 6% as extremely poor. Six per cent of the population did not have a toilet or a latrine, and only 16% in the rural area had indoor running water. The surveillance system revealed that 10% were illiterate. CONCLUSIONS: The HDSS in León has shown that it can serve as a platform for further intervention studies as well as for research training.