BACKGROUND: In Ethiopia guidelines for diagnoses and treatment of leishmaniases are available, but only a few hundred people are diagnosed and receive treatment. A field study has been carried out to determine the status and environmental determinants of cutaneous leishmaniasis (CL) and assess the degree of awareness of the rural communities in affected areas in Tigray, northern Ethiopia. METHODOLOGY / PRINCIPAL FINDINGS: Following a reconnaissance survey that identified endemic foci, a cross sectional door-to-door survey was conducted in 2009 in five rural communities around the towns of Adigrat and Hagereselam in Tigray. In total 9,622 residents of 1,721 households were clinically screened and household heads interviewed regarding the determinants of infection. The χ2 test and logistic regression were used to determine differences in prevalence between localities, age and sex, and to identify environmental determinants of infection. The overall prevalence of localized CL was 2.3% (highest 4.7%), with marked inter-village differences. Another 20.9% had scars from previous infections. While risk was sex-independent, prevalence was significantly higher in the 0-9 (4.5%) and 10-19 (2.5%) age groups and predominantly involved the face (82.1%) and upper limbs (13.1%). Nearly 11% of the households had one or more cases of CL and this was associated with proximity to hyrax habitats. All interviewees were knowledgeable about the lesions but ignorant of the disease's mode of transmission and its association with hyraxes. CONCLUSIONS: The study established that CL is an important public health problem in the study communities, and has been so for a while, as demonstrated by the widespread presence of scars. CL in Tigray appeared to be predominantly of zoonotic nature, mainly transmitted in peri-domestic habitats in proximity to hyrax habitats. Integrated interventions, including awareness creation, are highly recommended.