Peripheral nerve damage is the hallmark of leprosy pathology but its etiology is unclear. We previously identified the membrane attack complex (MAC) of the complement system as a key determinant of post-traumatic nerve damage and demonstrated that its inhibition is neuroprotective. Here, we determined the contribution of the MAC to nerve damage caused by Mycobacterium leprae and its components in mouse. Furthermore, we studied the association between MAC and the key M. leprae component lipoarabinomannan (LAM) in nerve biopsies of leprosy patients. Intraneural injections of M. leprae sonicate induced MAC deposition and pathological changes in the mouse nerve, whereas MAC inhibition preserved myelin and axons. Complement activation occurred mainly via the lectin pathway and the principal activator was LAM. In leprosy nerves, the extent of LAM and MAC immunoreactivity was robust and significantly higher in multibacillary compared to paucibacillary donors (p = 0.01 and p = 0.001, respectively), with a highly significant association between LAM and MAC in the diseased samples (r = 0.9601, p = 0.0001). Further, MAC co-localized with LAM on axons, pointing to a role for this M. leprae antigen in complement activation and nerve damage in leprosy. Our findings demonstrate that MAC contributes to nerve damage in a model of M. leprae-induced nerve injury and its inhibition is neuroprotective. In addition, our data identified LAM as the key pathogen associated molecule that activates complement and causes nerve damage. Taken together our data imply an important role of complement in nerve damage in leprosy and may inform the development of novel therapeutics for patients.