Background Detection and pathology analysis of Mycobacterium leprae using skin biopsy tissues are essential for leprosy diagnosis and monitoring response to treatment. Although formalin fixation of patient tissues may not be ideal for molecular studies, biopsy samples are the most accessible material from suspected cases. Therefore, clinical molecular laboratories must be able to utilize formalin-fixed, paraffin-embedded (FFPE) material. Objective To determine the best molecular method for diagnosing and monitoring leprosy in FFPE specimens, we developed a single-tube nested PCR (STNPCR) (131 bp) and SYBRGreen PCR (101 bp) assay using primers for the M. leprae-specific repetitive element (RLEP) gene and evaluated the results compared to those using previously established RLEP primers (372 bp). Methods FFPE biopsy samples obtained from 145 leprosy patients (during or after multidrug therapy (MDT)) and patients with 29 other confounding dermatoses were examined by the bacteria index (BI) and by simple PCR, STNPCR, and SYBRGreen PCR using primers amplifying a 372-bp, 131-bp or 101-bp fragment of RLEP, respectively. Results In leprosy patients receiving MDT, STNPCR showed a highest specificity of 100% and a positive predictive value (PPV) of 100%. For multibacillary (MB), paucibacillary (PB) and all leprosy patients, the highest sensitivities were 91.42%, 39.13%, and 67.92%, negative predictive values (NPVs) were 8.57%, 60.36%, and 32.07%, and the highest accuracies were 93.93%, 62.67%, and 74.81%, respectively, higher than the results of SYBRGreen PCR and simple PCR. For post-MDT leprosy patients, SYBRGreen PCR showed the highest sensitivity of 50.0%, highest specificity of 100%, a PPV of 100%, an NPV of 100% and the highest accuracy of 83.72% for MB patients, which were higher than those of STNPCR and simple PCR. STNPCR showed the highest sensitivity of 26.66% and 34.48%, highest specificity of 100% and 100%, a PPV of 100% and 100%, NPV of 72.50% and 60.21%, and highest accuracy of 75.00% and 67.24% for PB and leprosy patients, respectively, higher than those of SYBRGreen PCR and simple PCR. Conclusions These findings suggest that STNPCR or SYBRGreen PCR (131-bp and 101-bp fragment amplification, respectively) for RLEP using FFPE specimens performs better as a diagnostic test and for monitoring response to MDT than does simple PCR based on 372-bp fragment amplification. Additionally, STNPCR showed increased sensitivity for PB diagnosis using FFPE specimens, which can be transferred remotely or retrieved from previous leprosy patients.