The WC7+ absorption class Wolf-Rayet star WR 137 (=HD 192641) is shown to have brightened significantly in the infrared since 1978, most rapidly between 1983 and mid-1984. This is ascribed to an increase in the mass loss rate and the condensation of dust grains in the stellar wind. At maximum, the dust mass was about 10-8 Msun with a formation rate near 10-7 Msun yr-1, about 0.5 per cent of the mass loss rate. This was not accompanied by any strengthening of the 2200 Å absorption feature measured by the IUE between 1980 and 1984 although the shell was too weak to rule out any connection between the 2200 Å absorption feature and the carbon grains presumed to comprise the shell. The fading of WR 137 in the infrared between 1973 and 1978 may have been due to the dissipation of an earlier dust shell and WR 137 may resemble WR 140 (=HD 193793, also WC7+abs) in showing sporadic dust formation episodes.