Type 1 reaction (T1R) or reversal reaction is the leading cause of physical disabilities and deformities in leprosy. Leprosy patients, even after being considered cured and released from treatment, may suffer from reactional episodes for long periods of time. Early diagnosis is a great challenge for effectively treating and managing T1R. There is an urgent need to identify the most significant biomarkers to prevent recurrent T1R and to differentiate late T1R from relapse. T1R continues to be treated with corticosteroids and complications due to iatrogenic treatment remain frequent. This review aims to provide a framework from which to approach the great challenges that still persist in T1R management and debate key issues in order to reduce the distance between basic research and the clinic.