Since 1972 the New Zealand Police Department has operated an undercover program. For much of this time the department has used an external, independent mental health professional to assist in the selection, training, health and welfare monitoring, and post- deployment rehabilitation of these officers. The author did this work from 1985 to 1991. This study developed data from a randomly selected group of 37 officers. Most agents were deployed in solitary operations; however, occasionally pairs, married couples, and common-law married couples were used. Once deployed, every few months the agent's psychiatric status was clinically reviewed. If problems arose at any juncture, consultations with the mental health consultant were arranged. The police administration rated 41 percent of the agents very successful in their duties; another 24 percent were rated successful; and for 35 percent of the officers, the police objectives of the operation were not achieved. Emerging during the training process and enhanced by the "rush" of deployment, exacerbations of narcissistic traits became apparent in the agents. The clinical impression was that moderate rather than minor or severe narcissism correlated with operational success. Minor escalations of anxiety, especially following traumatic incidents were common. During the period 1985-91, 16 percent of the undercover agents suffered major psychological or psychiatric sequelae. Persisting narcissistic reactivity and alcohol or drug misuse were the clinical indexes that allowed the early recognition of serious psychiatric problems. One officer suffered post-traumatic stress disorder, another a major depressive disorder, and the remainder presented with significant difficulty in regaining their prior police identity and lifestyle. The psychological casualty rate of 16 percent is high. The psychological care of undercover agents must remain a high priority if the risk of harm is to be minimized. 29 references