Last summer, Karen Grace, a 36-year-old Silver Spring pharmacist, took an over-the-counter nutritional supplement called L-tryptophan to combat insomnia. It helped her sleep, but it also gave her seizures and made her immune system go awry. Her skin turned waxy, stiff as wood and bumpy like an orange peel. Her arms and legs swelled painfully; her hair fell out.

"I was in agony all the time," Grace said. At the time "My hands were so swollen that I could not tie my 5-year-old son's shoes." Grace said her legs became so inflated that "you could touch my leg and leave your hand print. My legs would swell so much that my pantyhose would explode."

Karen Grace is one of at least 1,535 Americans who became ill after consuming a chemically contaminated batch of L-tryptophan that was imported into the United States from Japan. L-tryptophan had been widely sold as an over-the-counter remedy for insomnia, weight loss, premenstrual syndrome and other ailments.

The number of Americans sickened by toxic L-tryptophan is probably much higher, at least 3,000, according to the Centers for Disease Control, perhaps as high as 5,000 or 10,000, according to other estimates. So far, 27 Americans have died; at least 60 cases have been reported in West Germany but only two in Japan.

The Food and Drug Administration banned all forms of L-tryptophan last March; since then, the number of new cases has slowed to a trickle -- four new cases were reported in July. But the impact of this strange man-made epidemic continues to grow as doctors search for ways to treat the baffling illness.

New cases are expected to occur because the compound can cause sickness weeks, even months, after people stop taking it, said Christopher King of the National Institute of Allergy and Infectious Diseases.

Federal health officials are also concerned that the supplement is still hanging around in the back of medicine cabinets and people are unaware they shouldn't take it, said Thomas L. Schwarz of the FDA's Center for Food Safety and Applied Nutrition.

Researchers remained baffled about why the contaminated L-tryptophan overstimulates the immune system to do so much harm. They know the chemical contaminant affects the production of a type of white blood cell called an eosinophil, a potent immune cell that destroys complex organisms such as parasites. Eosinophils can also damage normal body tissues when they release their destructive chemicals in the wrong place.

Initially, doctors thought the contaminated L-tryptophan directly stimulated overproduction of eosinophils, causing eosinophilia-myalgia syndrome or EMS, a disorder in which the number of these cells increases from about 3 percent of white blood cells to more than 50 percent.

Researchers now believe that the T cell, the central control cell in the body's immune response, is triggered by the L-tryptophan to turn on eosinophil production. As Gerald J. Gleich, chairman of immunology at the Mayo Clinic described it, the eosinophils are just hit men for the mob boss, the T cells. In the process, the eosinophils attack nerves and other tissue, causing unrelenting pain.

Some patients suffer what is called "ascending paralysis" in which a person loses nerve control of the feet, followed by the legs, then bowels and finally the lungs, requiring a respirator inorder to breathe. In most cases, nerve damage is not reversible, and at least two patients died after their lungs were paralyzed, said NIAID's King.

The main treatment is the drug prednisone, a powerful steroid that shuts down the immune system. It has proved useful in slowing the acute effects of the illness, but, said King, "we really don't have any good therapy for it."

Many patients remain sick, even while taking prednisone. So far, few of the patients in the Washington area -- at least 35 are in one support group, but the exact number is unknown -- have been able to get off daily doses of the medication. Chronic use of prednisone causes many side effects, including the loss of protein in muscles and bones.

The experience of Mayo Clinic's Gleich is more optimistic. "Many, if not most of the patients, are clearly getting better," he said, adding that the three patients in New Mexico who led to the discovery of the epidemic last year have all recovered. "They are all off prednisone, and they are doing pretty well."

A number of studies on the illness are under way, including three funded by Showa Denko K.K. of Tokyo, a major chemical manufacturer that made the contaminated L-tryptophan. A company spokesman said the Japanese company has donated nearly $750,000 for research, including work at Georgetown University Medical Center to find better ways to treat patients and studies at George Washington School of Medicine and the University of Wisconsin to understand how L-tryptophan is metabolized.

In the Georgetown study, Daniel Clauw, the rheumatologist taking care of Karen Grace, has placed her on cyclosporin, a drug used to prevent the rejection of transplanted organs because it effectively suppresses the immune system. Although Grace seems to be responding well to the drug, she is still sick with recurring symptoms.

When the epidemic was first recognized in the fall of 1989, doctors quickly linked the sickness to L-tryptophan and then tracked the illness-causing chemical to Showa Denko. At the same time, it is not known what chemical in the preparation is causing the problem. L-tryptophan itself is not suspected.

Finding the answer is critical, said Henry Falk, director of CDC's division of environmental hazards and health effects. "It may have come from one company, but another company can fall into the same trap if we don't know what happened. We have to make sure this doesn't happen again."

The search may become urgent because of renewed efforts to get L-tryptophan back on the American market. At least one health food group already has approached the FDA about lifing the ban. Burton Kallman, scientific director of the National Nutritional Foods Association in Costa Mesa, Calif., a health food industry trade association that represents some 3,000 retailers, said, "We are lobbying to get L-tryptophan back on the market. L-tryptophan had a long record of safe use prior to this epidemic, and it could be placed back on the market with adequate safeguards."

The Council for Responsible Nutrition, however, a trade association that represents manufacturers of health food supplements, is not currently backing such a proposal.

The FDA is cautious, too. A staff memo has urged acting FDA Commissioner James Benson to order a permanent ban on L-tryptophan. "The {FDA's food safety} center's recommendation is that L-tryptophan not be allowed back on the market, even if we find the contaminant" that caused the epidemic, said Schwarz. He said he believes the FDA may rule on a permanent L-tryptophan ban within the next month.

The L-tryptophan epidemic also raises questions about other amino acid supplements still on the market. More than a dozen amino acids are sold in pill form as nutritional supplements. They are mostly used by body builders to stimulate muscle growth.

According to federal law, amino acid supplements can only be used by adding them to some other food; they are not supposed to be taken in pill form, although the FDA has not moved to take these pills off the market.

Whether FDA will ban the other amino acids remains unclear, but the safety issue of nutritional supplements has become the subject of political debate.

"The question," said Sidney M. Wolfe, a physician and director of the Health Research Group, a consumer health group in Washington, "is why the FDA waited until harm occurred to take action."