Cutaneous leishmaniasis (CL) continues to be an increasing public health problem in Iran. Shiraz, a city in Fars Province in southwestern Iran, is one of the endemic foci of CL. However, there is no formal report of endemicity of CL in rural areas of Shiraz. To our knowledge, this is the first report of an epidemic of zoonotic CL in this area. The purpose of this study was to examine the epidemiological features of leishmaniasis in three villages in rural areas of Shiraz and to identify the causative species of leishmaniasis using nested PCR with clinical direct samples. The prevalence of infection among 1000 inhabitants of the three villages was 23.2%. Prevalences of ulcers and scars were 7 and 16.2%, respectively. The most infected age group was 0-9 years, with a rate of 14.2%. Children are more than twice as susceptible to the infection. In this study, the Leishmania major strain was identified in the majority of cases. The results of this epidemiological study indicate a high prevalence of leishmaniasis in rural areas of Shiraz.