Since a long time, Leishmania major and L. infantum foci in Algeria were geographically separated by the mountains of the Tell Atlas which represent a natural barrier. Recently, a new focus of cutaneous leishmaniasis (CL) has emerged in the village of El M'hir, located on the north side of the chain of the Tell Atlas, in the basin of the Soummam. During the period 2004-2010, 152 CL cases have been registered and 12 isolates were obtained from patients who declared never having been outside the village the last years. The identification of the parasites showed that all strains belonged to L major MON-25. Investigations on the reservoir hosts showed the presence of the sand rat (Psammomys obesus), for the first time, in this locality. Five strains isolated from this rodent belonged to L. major MON-25. The sand rat, which is usually observed around the chotts in the Saharan and steppe areas, acts as the main reservoir of L. major in Algeria. Its presence in the new focus of El M'hir is reported for the first time. Entomological surveys carried out in 2009 showed the predominance of two sandfly species: Phlebotomus papatasi and P. perniciosus. The first one is known as a vector of L major in the Algerian Sahara. This study highlights the spread of L. major from the arid zones towards the semi arid areas, particularly in the Soummam valley. Climate changes and desertification observed in the steppe area northern Sahara could play a role in the extension of the disease.