Leishmania donovani, a protozoan parasite, causes a strong immunosuppression in a susceptible host and inflicts the fatal disease visceral leishmaniasis. Relatively high toxicity, low therapeutic index, and failure in reinstating host-protective anti-leishmanial immune responses have made anti-leishmanial drugs patient non-compliant and an immuno-modulatory treatment a necessity. Therefore, we have tested the anti-leishmanial efficacy of a combination of a novel immunomodulator, Mycobacterium indicus pranii (Mw), and an anti-leishmanial drug, Amphotericin B (AmpB). We observe that Mw alone or with a suboptimal dose of AmpB offers significant protection against L. donovani infection by activating the macrophages. Our experiments examining the anti-leishmanial activity of Mw alone or with AmpB also indicate a p38MAPK and ERK-1/2 regulated pro-inflammatory responses. The Mw-AmpB combination induced nitric oxide production, restored Th1 response, and significantly reduced parasite burden in wild type macrophages but not in IL-12-deficient macrophages indicating a pivotal role for IL-12 in the induction of host-protection by Mw and AmpB treatments. In addition, we observed that Mw alone or in combination with suboptimal dose of AmpB render protection against L. donovani infection in susceptible BALB/c mice. However, these treatments failed to render protection in IL-12-deficient mice in vivo which added further support that IL-12 played a central role in this chemo immunotherapeutic approach. Thus, we demonstrate a novel chemo-immunotherapeutic approach- Mw and AmpB crosstalk eliminating the parasite-induced immunosuppression and inducing collateral host-protective effects.