MCLEODUSA INCORPORATED
 
                             OFFER TO EXCHANGE ITS
                     9 1/4% SENIOR NOTES DUE JULY 15, 2007
          WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
                      FOR ANY AND ALL OF ITS OUTSTANDING
                     9 1/4% SENIOR NOTES DUE JULY 15, 2007
 
TO OUR CLIENTS:
 
  Enclosed for your consideration is a Prospectus, dated August  , 1997 (the
"Prospectus"), and a form of Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of McLeodUSA
Incorporated (the "Company") to exchange its 9 1/4% Senior Notes due July 15,
2007, which have been registered under the Securities Act of 1933 (the
"Exchange Notes"), for any and all of its outstanding 9 1/4% Senior Notes due
July 15, 2007 (the "Senior Notes"), upon the terms and subject to the
conditions described in the Prospectus and the Letter of Transmittal. The
Exchange Offer is being made in order to satisfy certain obligations of the
Company contained in the Registration Agreement dated as of July 21, 1997,
among the Company, Salomon Brothers Inc, Morgan Stanley Dean Witter and Bear,
Stearns & Co. Inc.
 
  This material is being forwarded to you as the beneficial owner of the
Senior Notes carried by us in your account but not registered in your name. A
TENDER OF SUCH SENIOR NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS.
 
  Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Senior Notes held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
 
  Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender the Senior Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City time, on     , 1997, unless extended by the Company (the
"Expiration Date"). Any Senior Notes tendered pursuant to the Exchange Offer
may be withdrawn, subject to the procedures described in the Prospectus and
the Letter of Transmittal, at any time prior to the Expiration Date.
 
  If you wish to have us tender your Senior Notes, please so instruct us by
completing, executing and returning to us the instruction form included with
this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION
ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER SENIOR NOTES.

 
                         INSTRUCTIONS WITH RESPECT TO
                              THE EXCHANGE OFFER
 
  The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein, including the Prospectus and the accompanying
form of Letter of Transmittal, relating to the Exchange Offer made by
McLeodUSA Incorporated with respect to its Senior Notes.
 
  This will instruct you as to the action to be taken by you relating to the
Exchange Offer with respect to the Senior Notes held by you for the account of
the undersigned, upon and subject to the terms and conditions set forth in the
Prospectus and the Letter of Transmittal.
 
  The aggregate principal amount of the Senior Notes held by you for the
account of the undersigned is (fill in amount):
 
                     $ ___________________________________
 
                             of the 9 1/4% Senior
                            Notes due July 15, 2007
 
  With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
 
  [_]To TENDER the following Senior Notes held by you for the account of the
     undersigned (insert aggregate principal amount at maturity of Senior
     Notes to be tendered, in integral multiples of $1,000):
 
                     $ ___________________________________
 
                             of the 9 1/4% Senior
                            Notes due July 15, 2007
 
  [_]NOT to tender any Senior Notes held by you for the account of the
     undersigned.
 
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  If the undersigned instructs you to tender the Senior Notes held by you for
the account of the undersigned, it is understood that you are authorized to
make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations, warranties and agreements
contained in the Letter of Transmittal that are to be made with respect to the
undersigned as beneficial owner.
 
                                   SIGN HERE
 
Name of beneficial owner(s): __________________________________________________
 
Signature(s): _________________________________________________________________
 
Name(s) (please print): _______________________________________________________
 
Address: ______________________________________________________________________
 
Telephone Number: _____________________________________________________________
 
Taxpayer Identification or Social Security Number(s): _________________________
 
Date: _________________________________________________________________________
 
  None of the Senior Notes held by us for your account will be tendered unless
we receive written instructions from you to do so. Unless a specific contrary
instruction is given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Senior Notes held by us for
your account.
 
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