The occurrence of acute cutaneous leishmaniasis among inhabitants of 10 farms within 10 Km of the hamlet of Corte de Pedra, Bahia, Brazil was studied prospectively from 1984-1989. A mean population of 1,056 inhabitants living in 146 houses were visited every 6 months and the number of skin ulcers recorded. A leishmanin skin test survey was done people with suggestive skin scars or active disease in 1984. The incidence of skin ulcers due to Leishmania (Viannia) braziliensis (Lvb) reached 83/1,000 inhabitants but declined sharply in the subsequent 2 years. Retrospective data shows that leishmaniasis is a sporadic endemic disease. Although the reasons for this epidemic are unclear some possible aetiological factors are discussed.