Exhibit 99.1

FOR IMMEDIATE RELEASE

                  McLeodUSA Announces Extension of Forbearance
                             Agreement with Lenders

     o    Company continues focus on preparations for capital restructuring

     o    No recovery expected for preferred or common stockholders


CEDAR RAPIDS, Iowa - September 9, 2005 - McLeodUSA Incorporated, one of the
nation's largest independent, competitive telecommunications services
providers, today announced that the Company and its lenders have agreed to a
further extension through September 30, 2005 of the forbearance agreement
initially entered into on March 16, 2005 and subsequently extended to September
9, 2005. As previously announced, the Company has been negotiating the terms of
a capital restructuring with its lenders. The parties agreed to extend the
forbearance agreement in order to permit completion of these negotiations.
Under the terms of the forbearance agreement, the lenders continue to agree not
to take any action as a result of non-payment by the Company of certain
principal and interest payments and any related events of default through
September 30, 2005.

While the Company has made significant progress in completing these
negotiations, there can be no assurances 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.

In addition, the capital restructuring alternatives being negotiated with the
Company's lenders do not involve any recovery for the Company's current
preferred stock or common stock holders. Accordingly, the Company does not
expect its preferred or common stockholders to receive any recovery in a
capital restructuring.

The Company believes that by not making principal and interest payment 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 negatively impacting its customers or vendors. The Company 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, 39 voice switches, 698 collocations and 432 DSLAMs. The
Company today has approximately 1,730 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