Leprosy is chronic infectious disease of man, caused by Mycobacterium leprae, affecting peripheral nerves, skin and sometimes other tissues. Hepatic involvement is seen in all stages of the leprosy, more so in lepra reactions. Aim: The present study was undertaken to evaluate hepatic status by studying the various liver function tests in leprosy patients as well as in patients of lepra reaction. Methodology: Sixty untreated leprosy patients (30 Multibacillary, 30 Paucibacillary) with duration of illness varying from one month to three years were considered. Hepatic functional status was evaluated by estimation and comparison of variations in the levels of liver enzymes, proteins (Albumin, Globulin) and Australia antigen in paucibacillary, multibacillary leprosy and type I__ampersandsignamp;2 lepra reactions. Results: Deceased levels of serum albumin were noted in all forms of leprosy except in type II reaction while serum globulins were decreased only in paucibacillary leprosy. Raised levels of SGOT were found in all forms of leprosy including lepra reactions. However SGPT was significantly raised in type II lepra reaction. Serum bilirubin was raised in type II lepra reaction while raised levels of serum alkaline phosphatase were observed in type I lepra reaction. Serum cholesterol levels were decreased in all forms of leprosy except in type I reactions. Conclusion: We found that liver is significantly affected in leprosy and in lepra reactions. Assessment of liver functions is useful to measure the severity of affection of the liver in leprosy and for monitoring the patients on antileprosy treatment..