Leprosy type 1 reactions (T1R) are due to increased cell-mediated immunity and result in localized tissue damage. The anti-inflammatory drug prednisolone is used for treatment, but there is little good in vivo data on the molecular actions of prednisolone. We investigated the effect of prednisolone treatment on tumor necrosis factor alpha (TNF-alpha), interleukin-1beta (IL-1beta), IL-10, and transforming growth factor beta1 (TGF-beta1) mRNA and protein expression in blood and skin biopsies from 30 patients with T1R in India. After 1 month of prednisolone treatment the sizes of the skin granulomas were reduced, as were the grades of cells positive for TNF-alpha and IL-10 in skin lesions. Increased production of TGF-beta1 was seen in skin lesions after 6 months of prednisolone treatment. Expression of mRNA for TNF-alpha, IL-1beta, and TGF-beta1 was reduced, whereas no change in IL-10 mRNA expression was detected during treatment. The circulating cytokine profiles were similar in patients with and without T1R, and prednisolone treatment had no detectable effects on cytokine expression in the blood. The data emphasize the compartmentalization of pathology in T1R and the importance of the immune response in the skin. Clinical improvement and cytokine expression were compared. Surprisingly, patients with improved skin and nerve function and patients with nonimproved skin and nerve function had similar cytokine profiles, suggesting that clinical improvement is not directly mediated by the cytokines studied here. This in vivo well-controlled study of the immunosuppressive effects of prednisolone showed that the drug does not switch off cytokine responses effectively.