Mycobacterium leprae, the causative agent of leprosy, is uncultivable in defined media. Development of new diagnostic tools which do not depend on growth of bacteria is needed for the early detection of M. leprae and for monitoring the effectiveness of chemotherapy. We used a real-time PCR-based assay to quantify the copy number of bacterial DNA and hsp18 mRNA from 47 leprosy patients using paraffin-embedded biopsy samples. The assay used was specific, sensitive and reproducible. The applicability of this approach in monitoring the chemotherapy of leprosy was examined. A reduction in DNA and mRNA during chemotherapy was observed and hsp18 mRNA could not be detected in patients who underwent 2 years of multidrug therapy (MDT). However, a considerable amount of M. leprae DNA could be detected even after 2 years of MDT. A significant amount of hsp18 mRNA was found in reactional cases as well. This raises important questions regarding the role of bacterial antigens in leprosy reactions and the rationale of omitting antibiotics in the treatment of reactional cases. Results in this study show that real-time PCR could be a better tool for the careful monitoring of bacillary DNA and mRNA in lesions, which will help to improve diagnosis, disease progression and the treatment regimen.