Genetic manipulation of single-celled organisms such as the Leishmania parasite enables in depth analysis of the consequences of genotypic change on biological function. In probing the immune responses to infection, use of transgenic Leishmania has the potential to unravel both the contribution of the parasite to the infection process and the cellular interactions and mechanisms that characterize the innate and adaptive immune responses of the host. Here, we briefly review recent technical advances in parasite genetics and explore how these methods are being used to investigate parasite virulence factors, elucidate immune regulatory mechanisms and contribute to the development of novel therapeutics for the leishmaniases. Recent developments in imaging technology, such as bioluminescence and intravital imaging, combined with parasite transfection with fluorescent or enzyme-encoding marker genes, provides a rich opportunity for novel assessment of intimate, real-time host-parasite interactions at a previously unexplored level. Further advances in transgenic technology, such as the introduction of robust inducible gene cassettes for expression in intracellular parasite stages or the development of RNA interference methods for down-regulation of parasite gene expression in the host, will further advance our ability to probe host-parasite interactions and unravel disease-promoting mechanisms in the leishmaniases.