Cutaneous leishmaniasis caused by Leishmania parasites exhibits a wide range of clinical manifestations. Although parasites influence disease severity, cytolytic CD8 T cell responses mediate disease. While these responses originate in the lymph node, we find that expression of the cytolytic effector molecule granzyme B is restricted to lesional CD8 T cells in Leishmania - infected mice, suggesting that local cues within inflamed skin induce cytolytic function. Expression of Blimp-1 ( Prdm1 ), a transcription factor necessary for cytolytic CD8 T cell differentiation, is driven by hypoxia within the inflamed skin. Hypoxia is further enhanced by the recruitment of neutrophils that consume oxygen to produce reactive oxygen species, ultimately increasing granzyme B expression in CD8 T cells. Importantly, lesions from cutaneous leishmaniasis patients exhibit hypoxia transcription signatures that correlate with the presence of neutrophils. Thus, targeting hypoxia-driven signals that support local differentiation of cytolytic CD8 T cells may improve the prognosis for patients with cutaneous leishmaniasis, as well as other inflammatory skin diseases where cytolytic CD8 T cells contribute to pathogenesis.