In a clinico-pathological study of Indeterminate leprosy, fifty-six cases were chosen based on specified clinical criteria. Their clinical features were noted, the smears for acid fast bacilli (AFB) were prepared from lesions, lepromin inoculation and biopsies were performed from the lesional edges. They were subsequently treated with a modified extended WHO regimen for paucibacillary leprosy. On routine hematoxylin eosin (HE) and Fite-Faraco staining of paraffin embedded sections, histopathological confirmation of Indeterminate leprosy was observed in only 17/56 (31%) of the clinically diagnosed cases whereas the remaining were labelled as non-specific pathology. Histometric analysis of all HE stained sections did not show any characteristic finding which could be considered as characteristic and discriminatory for Indeterminate leprosy. Immunoperoxidase staining for demonstration of mycobacterial antigen by direct staining procedure using conjugated rabbit anti-BCG and indirect three step procedure using primary rabbit anti-BCG and avidin biotin complex, was next performed on the sections exhibiting non-specific pathology. With the direct immunoperoxidase method, antigen was demonstrable in (11/35) 31% of the cases. The more sensitive indirect method could demonstrate the presence of antigen in (21/35) 60% of the cases. This study thus shows that demonstration of mycobacterial antigen by simple and inexpensive immunoperoxidase techniques enhances the histopathologic diagnosis of Indeterminate leprosy.