Lipodermatosclerosis refers to the skin induration and hyperpigmentation of the legs that often occurs in patients who have venous insufficiency. Lipodermatosclerosis has also been termed hypodermitis sclerodermiformis and appears to be similar if not-identical to the recently described sclerosing panniculitis of the leg. There has been much confusion about the nature, clinical course, and treatment of lipodermatosclerosis. We believe that lipodermatosclerosis has an acute, inflammatory phase and a chronic, fibrotic stage, although a spectrum exists. Direct immunofluorescence studies of early and late lesions are helpful in that they show dermal pericapillary fibrin deposits without other immunoreactants. Treatment of lipodermatosclerosis consists of compression therapy with either graded stockings or elastic bandages. We and others have found that the anabolic steroid stanozolol improves this condition rapidly and consistently.