Post-kala-azar dermal leishmaniasis (PKDL) occurs after kala-azar treatment and acts as a durable infection reservoir. On the basis of active case finding among 22,699 respondents, 813 (3.6%) had had kala-azar since 2002, of whom 79 (9.7%) developed PKDL. Eight additional patients with PKDL had no history of kala-azar. Annual kala-azar incidence peaked at 85 cases per 10,000 person-years in 2004 and fell to 46 cases per 10,000 person-years in 2007, but PKDL incidence rose from 1 case per 10,000 person-years in 2002-2004 to 21 cases per 10,000 person-years in 2007. The rising PKDL incidence threatens the regional visceral leishmaniasis elimination initiative and underscores the urgent need for more effective PKDL diagnosis and treatment.