Topical 5% lidocaine medicated plasters represent a well-established first-line option for the treatment of peripheral localized neuropathic pain (LNP). This review provides an updated overview of the clinical evidence (randomized, controlled, and open-label clinical studies, real-life daily clinical practice, and case series). The 5% lidocaine medicated plaster effectively provides pain relief in postherpetic neuralgia, and data from a large open-label controlled study indicate that the 5% lidocaine medicated plaster is as effective as systemic pregabalin in postherpetic neuralgia and painful diabetic polyneuropathy but with an improved tolerability profile. Additionally, improved analgesia and fewer side effects were experienced by patients treated synchronously with the 5% lidocaine medicated plaster, further demonstrating the value of multimodal analgesia in LNP. The 5% lidocaine medicated plaster provides continued benefit after long-term (≤7 years) use and is also effective in various other LNP conditions. Minor application-site reactions are the most common adverse events associated with the 5% lidocaine medicated plaster; there is minimal risk of systemic adverse events and drug–drug interactions. Although further well-controlled studies are warranted, the 5% lidocaine medicated plaster is efficacious and safe in LNP and may have particular clinical benefit in elderly and/or medically compromised patients because of the low incidence of adverse events.