The National Income Dynamics Study (NIDS) is a nationally representative panel survey of 28 255 individuals that were resident in 7 305 households in South Africa at the time of the base wave in 2008. Attempts will be made to interview each of these individuals and all of their current household members at two-year intervals in the future. NIDS is the first national panel study of individuals of all ages in South Africa. As the panel unfolds, it will reveal the dynamic structure of households in South Africa and changes in the living conditions and well-being of household members. This article presents the core methodological decisions in the design of the first wave of the NIDS panel survey. It describes the data production process, the sampling methodology, the response rates, the derivation of weights, data processing issues and how researchers can download the data. The article concludes with a discussion of some key panel issues for NIDS going forward.