OBJECTIVE: To determine the efficacy of oral Miltefosine in patients with cutaneous leishmaniasis and its comparison with the most effective standard treatment, pentavalent antimony compound. DESIGN: A non-randomized, open label comparative clinical trial. PLACE AND DURATION OF STUDY: Dermatology Department, Military Hospital, Rawalpindi, Pakistan from March to October 2005. PATIENTS AND METHODS: Thirty patients, 12 years of age or older clinically and histopathologically diagnosed as cutaneous leishmaniasis were selected. Fifteen patients received orally administered Miltefosine 2.5mg/kg/day for 28 days and remaining 15 received injectable pentavalent antimony 20mg/kg/day for 28 days. Pre-treatment complete physical examination was done along with necessary laboratory investigations in all cases. These were repeated again after 2 weeks and at the end of treatment to note any deviation from the normal limits. Groups were almost matched in terms of age, weight, parasitological score. The efficacy was evaluated by ulcer size, before therapy, at 2 weeks and 4 weeks. Patients were followed-up at 3 and 6 months. Efficacy of two groups was statistically compared by calculating p-value by z-test. RESULTS: All patients completed the study without any serious complication. Lesions improved significantly and only scarring and post-inflammatory pigmentation was left. At 3 months, cure rate was 93% in group A and it was 73.33% in group B while at the end of 6 months, it was 86% and 66.6% respectively. This difference between efficacies of two groups was not found to be statistically significant (p-value>0.5). CONCLUSION: Miltefosine appears to be a safe and effective alternative to currently used therapies. The striking advantage of Miltefosine is its oral administration and it may also be helpful in regions where parasites are resistant to current agents.