In order to join in the Montmartre life - as well as to fortify himself against the crowd's ridicule of his appearance, Toulouse-Lautrec began to drink heavily, so that by the time he was 30 his health was deteriorating fast. In 1893 Dr. Bourges had married and Lautrec had moved back in with his mother, where he allowed his VD treatment to lapse. His drunken behaviour and the subjects he painted caused tension within the family and his uncle even set fire to some of his canvasses at Albi. Lautrec's private income was reduced, which forced him to work to make a living, but his painting was at a transitional stage and he was unable to concentrate on developing a new style. It must have been obvious to all concerned that he had become an alcoholic.
Friends rallied round and tried to get Lautrec away from Paris and all its temptations. Maurice Joyant, an old school-mate, would take him to the coast for yachting weekends and they twice visited England together. In 1898, Joyant arranged a one-man show for Lautrec in Goupil's Regent Street gallery. The exhibition was a total failure, but Lautrec did not care as he had lost all interest.
In 1897, while visiting the Natansons, Lautrec had suffered hallucinations and fired a pistol at imaginary spiders. He was unable to control his drinking and in 1899, after his mother left Paris for her country estate at Malrome, he fell under the influence of a livery-stable owner, who encouraged his weakness. By now he was a pathetic sight. He would sit all day drinking in a wine-merchant's shop and one day he was found burning newspapers in the lavatory bowl.
After a violent attack of delirium tremens in February 1899, Lautrec was committed by his mother to a private clinic in Neuilly, just outside Paris. The terror of being locked up for good seemed to spur him to a rapid recovery. He even started drawing again, mainly remembered circus scenes, as if to prove that he still had all his faculties. Finally, the Countess removed him from the sanitarium and Paul Viaud, an impoverished cousin, was paid to supervise him.
Viaud tried to distract Lautrec with holidays on the coast and visits to the opera, his late enthusiasm, but it was too late. At 36, he already looked like an old man, and in the summer of 1901, while taking the sea air near Bordeaux, Lautrec collapsed. His mother took him back to Malrome, where he died on 9 September 1901, just before his 37th birthday. He was buried in Verdelais, Gironde, a few kilometres from his birthplace. His last words were reportedly "Vieil imbécile!" ("Old fool"), in reference to his father, who was present at the scene.
After his death, his mother, the Comtesse Adèle Toulouse-Lautrec, and Maurice Joyant, his art dealer, promoted his art. His mother contributed funds for a museum to be built in Albi, his birthplace, to house his works. Before 2005, his paintings sold for as much as $14.5 million.
His oeuvre includes great numbers of paintings, drawings, etchings, lithographs, and posters, as well as illustrations for various contemporary newspapers. He incorporated into his own highly individual method elements of the styles of various contemporary artists, especially French painters Edgar Degas and Paul Gauguin. Japanese art, then coming into vogue in Paris, influenced his use of sharp delineation, asymmetric composition, oblique angles, and flat areas of color. His work served as inspiration for van Gogh, Georges Seurat, and Georges Rouault.