Cathelicidin-type antimicrobial peptides (CAMP) are important mediators of innate immunity against microbial pathogens acting through direct interaction with and disruption of microbial membranes and indirectly through modulation of host cell migration and activation. Using a mouse knock-out model in CAMP we studied the role of this host peptide in control of dissemination of cutaneous infection by the parasitic protozoan Leishmania. The presence of pronounced host inflammatory infiltration in lesions and lymph nodes of infected animals was CAMP-dependent. Lack of CAMP expression was associated with higher levels of IL-10 receptor expression in bone marrow, splenic and lymph node macrophages as well as higher anti-inflammatory IL-10 production by bone marrow macrophages and spleen cells but reduced production of the pro-inflammatory cytokines IL-12 and IFN-γ by lymph nodes. Unlike wild-type mice, local lesions were exacerbated and parasites were found largely disseminated in CAMP knockouts. Infection of CAMP knockouts with parasite mutants lacking the surface metalloprotease virulence determinant resulted in more robust disseminated infection than in control animals suggesting that CAMP activity is negatively regulated by parasite surface proteolytic activity. This correlated with the ability of the protease to degrade CAMP in vitro and co-localization of CAMP with parasites within macrophages. Our results highlight the interplay of antimicrobial peptides and Leishmania that influence the host immune response and the outcome of infection.