Early diagnosis of leprosy is challenging, particularly its inflammatory reactions, the major cause of irreversible neuropathy in leprosy. Current diagnostics cannot identify which patients are at risk of developing reactions. This study assessed blood RNA expression levels as potential biomarkers for leprosy. Prospective cohorts of newly diagnosed leprosy patients, including reactions, and healthy controls were recruited in Bangladesh, Brazil, Ethiopia and Nepal. RNA expression in 1,090 whole blood samples was determined for 103 target genes for innate and adaptive immune profiling by dual color Reverse-Transcription Multiplex Ligation-dependent Probe Amplification (dcRT-MLPA) followed by cluster analysis. We identified transcriptomic biomarkers associated with leprosy disease, different leprosy phenotypes as well as high exposure to Mycobacterium leprae which respectively allow improved diagnosis and classification of leprosy patients and detection of infection. Importantly, a transcriptomic signature of risk for reversal reactions consisting of five genes (CCL2, CD8A, IL2, IL15 and MARCO) was identified based on cross-sectional comparison of RNA expression. In addition, intra-individual longitudinal analyses of leprosy patients before, during and after treatment of reversal reactions, indicated that several IFN-induced genes increased significantly at onset of reaction whereas IL15 decreased. This multi-site study, situated in four leprosy endemic areas, demonstrates the potential of host transcriptomic biomarkers as correlates of risk for leprosy. Importantly, a prospective five-gene signature for reversal reactions could predict reversal reactions at least 2 weeks before onset. Thus, transcriptomic biomarkers provide promise for early detection of these acute inflammatory episodes and thereby help prevent permanent neuropathy and disability in leprosy patients.