In Old World Leishmania infections, Leishmania donovani is responsible for fatal visceral leishmaniasis, and L. major is responsible for non-fatal cutaneous leishmaniasis in humans. The genetic differences between these species which govern the pathology or site of infection are not known. We have therefore carried out detailed analysis of the A2 loci in L. major and L. donovani because A2 is expressed in L. donovani but not L. major, and A2 is required for survival in visceral organs by L. donovani. We demonstrate that although L. major contains A2 gene regulatory sequences, the multiple repeats that exist in L. donovani A2 protein coding regions are absent in L. major, and the remaining corresponding A2 sequences appear to represent non-expressed pseudogenes. It was possible to restore amastigote-specific A2 expression to L. major, confirming that A2 regulatory sequences remain functional in L. major. Although L. major is a cutaneous parasite in rodents and humans, restoring A2 expression to L. major inhibited its ability to establish a cutaneous infection in susceptible BALB/c or resistant C57BL6 mice, a phenotype typical of L. donovani. There was no detectable cellular immune response against L. major after cutaneous infection with A2-expressing L. major, suggesting that the lack of growth was not attributable to acquired host resistance but to an A2-mediated suppression of parasite survival in skin macrophages. These observations argue that the lack of A2 expression in L. major contributed to its divergence from L. donovani with respect to the pathology of infection.