Phenytoin has been implicated as a causative agent in peripheral neuropathy, although structural changes in nerve have not been characterized. A 47-year-old man was seen with clinical and electrophysiological signs of peripheral neuropathy after 30 years of phenytoin administration. Despite a modest dose of phenytoin (300 mg/day) blood levels were 31 to 38 micrograms/ml. A sural nerve biopsy showed a loss of large myelinated nerve fibers and a nonrandom clustered distribution of segmental demyelination and remyelination. The latter findings were accompanied by axonal shrinkage. Sixteen months after phenytoin was stopped, the patient's clinical and electrophysiological findings reflected improvement. These data indicate that long-term phenytoin administration can cause a reversible neuropathy characterized by axonal shrinkage and secondary demyelination.