The clinical characteristics and treatment outcome were determined for 26 patients who presented with early-stage cutaneous leishmaniasis. Illness duration ranged from 8 to 20 days, and the commonest clinical presentation was the presence of a papule with small central crust on a lower extremity. Prominent regional adenopathy was found in 22 (85%) of 26 patients. The results of an intradermal skin test for Leishmania were positive for 96% of those patients, and results of serologic testing were positive for 61% of patients tested. Ten (46%) of 22 patients for whom follow-up data were available developed enlargement and ulceration of the lesion despite early antimony therapy and required additional courses of treatment. Histopathological studies of samples from the lesions of 3 patients showed vasculitis. These data show that early therapy for cutaneous leishmaniasis does not prevent the development of an ulcer in one-half of patients. This unfavorable outcome underlines the relevance of local exacerbated inflammatory and immune response in the pathogenesis of the disease.