Despite the significant reduction in global leprosy prevalence in the advent of multidrug therapy, epidemiological evidence shows that new case detection rate in endemic countries is still substantial. In the past three decades, there has been much research effort into finding more sensitive and specific laboratory techniques for the early detection of leprosy infection to prevent the cutaneous eruptions and severe disabling neurological sequelae. Correct classification of leprosy subtypes for the purpose of instituting the appropriate drug regimen can only be achieved by including laboratory investigations with the clinical findings. Unfortunately, this is not always possible in resource restricted endemic regions. In this review, we aim to provide an overview of the traditional laboratory methods that have been in use as well as the newer serological and molecular tools that have shown potential in improving specificity and sensitivity of leprosy diagnosis. How these new diagnostic aids may contribute to the study of reactions in leprosy and of the monitoring of treatment efficacy, disease relapse, transmission, and risk of disease manifestation in household contacts will also be outlined in this article.