In May 2005, visceral leishmaniasis (VL) was recognized for the first time in Libo Kemkem, Ethiopia. In October 2005, a rapid assessment was conducted using data from 492 patients with VL treated in the district health center and a household survey of 584 residents of four villages. One subdistrict accounted for 71% of early cases, but the incidence and number of affected subdistricts increased progressively throughout 2004-2005. In household-based data, we identified 9 treated VL cases, 12 current untreated cases, and 19 deaths attributable to VL (cumulative incidence, 7%). Thirty percent of participants were leishmanin skin test positive (men, 34%; women, 26%; P = 0.06). VL was more common in men than women (9.7% versus 4.5%, P < 0.05), possibly reflecting male outdoor sleeping habits. Molecular typing in splenic aspirates showed L. infantum (six) and L. donovani (one). Local transmission resulted from multiple introductions, is now well established, and will be difficult to eradicate.