This is the first report of cutaneous leishmaniasis in kangaroos where infection was acquired within Australia. The diagnosis is based on the clinical criteria used for humans, the lesion histopathology, the detection and isolation of parasites from the lesions, and the analysis of the small subunit ribosomal RNA genes using the polymerase chain reaction. Despite a clear indication that the parasites belong to the genus Leishmania, no assignation to a known Leishmania species could be made using these or other less conserved genetic loci such as the non-transcribed spacer of the mini-exon repeat. As is the case in humans, some but not all animals harbouring lesions had antibodies to the isolated parasites or to several other Leishmania species. The isolated parasites displayed two well characterised Leishmania glycoconjugates, the lipophosphoglycan and proteophosphoglycan. They were infectious for mouse macrophages in vitro and established long-term infection at 33 degrees C but not at 37 degrees C. Our findings raise the possibility of transmission to humans, which may be unrecognised and suggest the possibility that imported species of Leishmania could become endemic in Australia.