The balance between the products of L-arginine metabolism in macrophages regulates the outcome of Leishmania major infection. L-arginine can be oxidized by host inducible NO synthase to produce NO, which contributes to parasite killing. In contrast, L-arginine hydrolysis by host arginase blocks NO generation and provides polyamines, which can support parasite proliferation. Additionally, Leishmania encode their own arginase which has considerable potential to modulate infectivity and disease pathogenesis. In this study, we compared the infectivity and impact on host cellular immune response in vitro and in vivo of wild-type (WT) L. major with that of a parasite arginase null mutant (arg(-)) L. major. We found that arg(-) L. major are impaired in their macrophage infectivity in vitro independent of host inducible NO synthase activities. As with in vitro results, the proliferation of arg(-) L. major in animal infections was also significantly impaired in vivo, resulting in delayed onset of lesion development, attenuated pathology, and low parasite burden. Despite this attenuated pathology, the production of cytokines by cells from the draining lymph node of mice infected with WT and arg(-) L. major was similar at all times tested. Interestingly, in vitro and in vivo arginase levels were significantly lower in arg(-) than in WT-infected cases and were directly correlated with parasite numbers inside infected cells. These results suggest that Leishmania-encoded arginase enhances disease pathogenesis by augmenting host cellular arginase activities and that contrary to previous in vitro studies, the host cytokine response does not influence host arginase activity.