Cutaneous leishmaniasis (CL) is an emerging disease in Sri Lanka, more than 400 cases having been reported since 2001. However, the morphology and taxonomic status of the Sri Lankan strain of Leishmania is not known yet. Therefore, it is important to study the morphology and to analyze the phylogenetic position to predict the risk and expansion of the disease and thereby to develop an effective control programme. Morphology of the amastigote of the Sri Lankan isolate was checked by light microscopy and electron microscopic observation. Presence of amastigotes within macrophages was confirmed in skin biopsy samples. The promastigote had the characteristic appearance of a kinetoplastid cell in cultures. The kinetoplast minicircle DNA has been used for diagnosis of Leishmania for a long time and also for phylogenetic studies on trypanosomatid flagellates. The kinetoplast minicircle was amplified using PCR and subsequently sequenced from samples obtained from Sri Lankan patients with cutaneous lesions. Mitochondrial cytochrome b gene has been recently shown to be useful for identification and phylogenetic analysis of the genus Leishmania. The nucleotide sequence of the cytochrome b gene of Sri Lankan Leishmania was determined using the semi-nested PCR and 620 bp of this gene obtained. Phylogenetic analysis using these sequences unambiguously indicated that Sri Lankan isolate of Leishmania belongs to L. donovani complex. However, the Sri Lankan isolate forms a distinct lineage within the complex and probably represents a new branch.