Twenty-four patients with refractory affective disorders who were taking carbamazepine were followed in an open-label fashion for an average of 4 years. Carbamazepine, usually in combination with lithium and other previously ineffective medications, reduced the number and severity of manic and depressive episodes. An overall illness index of morbidity (duration x severity) decreased 72% in the first year and 66% in the second year of carbamazepine treatment. One-half of the patients (N = 11) who were followed for more than 2 years showed a pattern of continued improvement (stable); the other half showed loss of prophylaxis (escape). Those showing the escape pattern had a more rapidly deteriorating course of illness in the 4 years before the study than those showing the stable improvement. Clinical and mechanistic implications of these findings are discussed, including the phenomenon of contingent tolerance as a possible explanation for the emergence of loss of efficacy in a subgroup of patients.