Sclerosing peritonitis (SP) is a rare but serious complication of peritoneal dialysis (PD). Small-bowel obstruction (SBO) due to encapsulation, dense adhesions, or mural fibrous is characteristic, often associated with peritonitis. The aim of the study was to determine the incidence, clinical features, effect of duration of dialysis, and other possible aetiological factors in severe SP. All dialysis units in Australia were surveyed for possible cases up to 1994. Patients were included if there was either surgical or radiological evidence of sclerosing encapsulating peritonitis or SBO with tanned or thickened peritoneum in the absence of other causes of SBO. Fifty-four patients were analysed. The duration of continuous PD was mean 52 +/- 30 months, median 48 months and range 8-127 months. Nineteen cases were diagnosed between 1980 and 1989 and 35 between 1990 and 1994, giving mean annual incidences 1.9 and 4.2 per 1000 PD periods respectively. The overall prevalence was 0.7%, which increased progressively with the duration of PD being 1.9, 6.4, 10.8, and 19.4% for patients on dialysis for > 2, 5, 6 and 8 years respectively. Sclerosing encapsulating peritonitis was diagnosed in 87% of cases, SBO in 92%, and haemoperitoneum in 8%. Peritoneal calcification was present in seven cases, all of which had been on PD > 7 years. Peritonitis was associated with 38% of cases with fungal infection in 7%. Treatment with immunosuppression in five patients appeared to result in a favourable outcome in three. The mortality rate was 56%. Severe sclerosing peritonitis is a serious complication of peritoneal dialysis and there is a time dependent increase on CAPD.