Progress in understanding the causation and immunopathogenesis of Lyme disease has continued in the past year. Only by studying the complex relationship between the infecting organism, Borrelia burgdorferi, and the host will improvements in therapy be possible. Physicians in the United States have evaluated large numbers of patients with late neurologic Lyme disease, and a more consistent clinical description of the North American experience is emerging. Laboratory diagnosis remains a problem. Improvements are being made in both the sensitivity and specificity of existing tests and also in the selection of appropriate patients by physicians. Both of these factors will improve predictive value.