To identify the prevalence and clinical features of leflunomide-associated peripheral neuropathy in patients with rheumatic disease over a 42-month observational period between January 1, 2016 and June 30, 2019. A retrospective observational study was conducted using regional prescription data identifying all patients treated with leflunomide for rheumatic diseases in the Southern District Health Board of New Zealand. Medical records were used to identify patients who developed peripheral neuropathy while receiving treatment with leflunomide. Demographic characteristics, co-therapies, and additional risk factors for peripheral neuropathy were also recorded. A total of 482 patients were identified as receiving leflunomide for the treatment of rheumatic during the study period. In total, 23 patients developed leflunomide-induced peripheral neuropathy within the cohort giving a prevalence of 4.7%. Nerve conduction studies (NCS) performed in 18 (78.2%) of these patients confirmed a distal axonal, sensory, or sensorimotor peripheral neuropathy. The majority of patients (n = 22; 95.6%) either improved, stabilized, or resolved on cessation of the drug, with or without medication washout. Adverse symptoms were reported in association with peripheral neuropathy in 15 of the 23 patients (65.2%): these included pain, poor sleep, compromised skin integrity, poor balance, and a Charcot-like arthropathy. Additional treatment was required to manage symptoms of peripheral neuropathy including nine patients (39%) who received pain relief. This study supports the previously reported association between leflunomide treatment and the development of a peripheral neuropathy. However, our findings suggest that this is more common than the previous estimates. In patients with psoriatic arthritis and previous tarsitis, there appeared to be an association with a Charcot's-like arthropathy, a complication not previously noted in the literature.