Whereas amastigotes of the protozoan parasite Leishmania proliferate inside acidic phagolysosomal vacuoles of the macrophage, vacuoles induced by Leishmania donovani promastigotes during initiation of infection are poorly characterized. Here, evidence is presented that interaction of these parasitophorous vacuoles with endocytic organelles is very limited. In contrast, vacuoles formed around L. donovani mutants lacking the cell surface lipophosphoglycan (LPG) fuse extensively with endosomes and lysosomes. The role of LPG repeating units in the inhibition of phagosome-endosome fusion was demonstrated using two different approaches. First, genetic complementation of the LPG-defective C3PO mutant restored its ability to inhibit phagosome-endosome fusion to a degree similar to that of wild-type promastigotes. Second, opsonization of C3PO mutant cells with purified L. donovani LPG also conferred to this mutant the ability to inhibit phagosome-endosome fusion. Inasmuch as LPG is essential for infecting macrophages, these results suggest that inhibition of phagolysosomal biogenesis by LPG repeating units represents an intramacrophage survival strategy used by promastigotes to establish infection.