Post-kala-azar dermal leishmaniasis (PKDL) is a dermal sequela of visceral leishmaniasis (VL), reported mainly from two regions – Sudan in eastern Africa and the Indian subcontinent, with incidences of 50–60% and 5–10%, respectively. Importantly, patients with PKDL are considered as reservoirs of VL, linking its eradication to effective control of PKDL. The etiopathogenesis of PKDL is presumably due to an immunological assault on latent dermal parasites. Immunological markers include IL-10, whose expression in skin and plasma of Sudanese patients with VL predicted onset of PKDL. Cell-mediated immune responses, notably restoration of IFN-γ production by antigen-stimulated lymphocytes are well documented in Sudanese PKDL, but remain ambiguous in the Indian form; recently, antigen-specific IL-10-producing CD8+ lymphocytes have been implicated in pathogenesis. In Indian PKDL, upregulation of intralesional IFN-γ and TNF-α is counterbalanced by IL-10 and TGF-β together with downregulated IFN-γ R1. Although IL-10 curtails excessive IFN-γ-mediated reactivity and ensures parasite survival, its cellular source remains to be confirmed, with infiltrating regulatory T cells (Tregs) being a likely candidate. Future functional investigations on Tregs and their interaction with lesional effector lymphocytes would be indispensable for development of immunomodulatory therapies against Leishmania infection.