A village population with hyperendemic leprosy in Papua New Guinea was repeatedly examined for clinical leprosy and for serum IgM antibodies to phenolic glycolipid-I (APGL-I) over 2 years between 1984 and 1986. In 1984, serum APGL-I was elevated in 15% of the subjects without clinical leprosy, and the prevalence of seropositivity was not significantly different in subjects from households with or without leprosy. In 1986, the prevalence of elevated serum APGL-I in leprosy-free subjects had risen to 23%. The incidence of seroconversion from APGL-I negative to APGL-I positive was 9.5% per year (95/1000 person years) in 253 subjects tested in 1984 and 1986. During the same period, 27 of 40 (67%) leprosy-free subjects reverted from positive to negative. The positive seroconversion rate in the community was higher than the incidence of clinical leprosy (11.2/1000 person years) over the same period. However, elevated serum APGL-I was not associated with clinical disease and failed to predict the development of disease over 2 years. The significance of persistent seropositivity found in 14 (5%) leprosy-free subjects is uncertain.