Exhibit 99.1

                  McLeodUSA Announces Resignation of Officers

     o   Chris Davis resigns as CEO; remains Chairman of the Board of Directors
     o   Ken Burckhardt resigns as CFO and Director
     o   Company proceeding with plans for a capital restructuring with no
         recovery expected for Preferred or Common Stockholders

CEDAR RAPIDS, Iowa -- August 15, 2005 -- McLeodUSA Incorporated, one of the
nation's largest independent, competitive telecommunications services
providers, today announced that, in connection with its anticipated capital
restructuring and change of ownership, Chris Davis, Chairman of the Board of
Directors and Chief Executive Officer of the Company resigned as Chief
Executive Officer effective August 12, 2005. Ms. Davis will remain as Chairman
of the Board of Directors. Also effective on August 12, Ken Burckhardt resigned
from his positions as Executive Vice President and Chief Financial Officer, and
a Director of the Company.

The Company has appointed Stan Springel of Alvarez & Marsal as Chief
Restructuring Officer. Alvarez & Marsal is a well-known firm that provides
management and consulting services for companies going through a restructuring
process. Joe Ceryanec, Group Vice President - Controller and Treasurer of the
Company has been appointed as the acting Chief Financial Officer.

As previously announced, the Company is working with its lenders to effectuate
a capital restructuring where the lenders would convert a substantial portion
of their debt to equity and become the Company's stockholders. None of the
restructuring alternatives under evaluation provide for any recovery for the
Company's current preferred or common stockholders. Therefore, the Company does
not expect holders of its preferred or common stock to receive any recovery in
a capital restructuring. In addition, there can be no assurance that the
Company will be able to reach an agreement with its lenders regarding a capital
restructuring on terms and conditions acceptable to the Company prior to the
end of the forbearance period on September 9, 2005. Under the forbearance
agreement, the lenders have agreed not to take any action as a result of
non-payment by the Company of certain scheduled principal amortization and
interest payments that are due on or before September 9, 2005.

The Company continues to believe that by not making principal and interest
payments on the credit facilities, cash on hand together with cash flows from
operations are sufficient to maintain operations in the ordinary course without
disruption of services or negative impact on its customers or suppliers.
McLeodUSA remains committed to continuing to provide the highest level of
service to its customers and to maintaining its strong supplier relationships.

About McLeodUSA
---------------

McLeodUSA provides integrated communications services, including local
services, in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The
Company is a facilities-based telecommunications provider with, as of June 30,
2005, 38 ATM switches, 38 voice switches, 698 collocations, 432 DSLAMs and
approximately 2,072 employees. Visit the Company's Web site at
www.mcleodusa.com

Some of the statements in this press release include statements about our
future expectations. Statements that are not historical facts are
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act. Such
statements may include projections of financial and operational results and
goals, including revenue, EBITDA, Adjusted EBITDA, profitability, savings and
cash. In some cases, you can identify these so-called "forward-looking
statements" by our use of words such as "may," "will," "should," "expect,"
"plan," "anticipate," "believe," "estimate," "predict," "project," "intend" or
"potential" or the negative of those words and other comparable words. These
forward-looking statements are subject to known as well as unknown risks and
uncertainties that may cause actual results to differ materially from our
expectations. Our expectations are based on various factors and assumptions and
reflect only our predictions. Factors that could cause actual results to differ
materially from the forward-looking statements include technological,
regulatory, public policy or other developments in our industry, availability
and adequacy of capital resources, our ability to continue as a going concern,
our ability to implement a strategic transaction or a capital restructuring,
current and future economic conditions, the existence of strategic alliances,
our ability to generate cash, our ability to implement process and network
improvements, our ability to attract and retain customers, our ability to
migrate traffic to appropriate platforms and changes in the competitive climate
in which we operate. These and other risks are described in more detail in our
most recent Annual Report on Form 10-K filed with the SEC. The Company
undertakes no obligation to update publicly any forward looking statements,
whether as a result of future events, new information or otherwise.

Contact:
McLeodUSA Incorporated, Cedar Rapids, IA
Investor Contact: Bryce Nemitz
Press Contact: Bruce Tiemann
Phone: (319) 790-7800