BACKGROUND: Miltefosine (MIL), the only oral drug for visceral leishmaniasis (VL), is currently the first-line therapy in the VL elimination program of the Indian subcontinent. Given the paucity of anti-VL drugs and the looming threat of resistance, there is an obvious need for close monitoring of clinical efficacy of MIL. METHODS: In a cohort study of 120 VL patients treated with MIL in Nepal, we monitored the clinical outcomes up to 12 months after completion of therapy and explored the potential role of drug compliance, parasite drug resistance, and reinfection. RESULTS: The initial cure rate was 95.8% (95% confidence interval [CI], 92.2-99.4) and the relapse rate at 6 and 12 months was 10.8% (95% CI, 5.2-16.4) and 20.0% (95% CI, 12.8-27.2) , respectively. No significant clinical risk factors of relapse apart from age <12 years were found. Parasite fingerprints of pretreatment and relapse bone marrow isolates within 8 patients were similar, suggesting that clinical relapses were not due to reinfection with a new strain. The mean promastigote MIL susceptibility (50% inhibitory concentration) of isolates from definite cures was similar to that of relapses. Although more tolerant strains were observed, parasite resistance, as currently measured, is thus not likely involved in MIL treatment failure. Moreover, MIL blood levels at the end of treatment were similar in cured and relapsed patients. CONCLUSIONS: Relapse in one-fifth of the MIL-treated patients observed in our study is an alarming signal for the VL elimination campaign, urging for further review and cohort monitoring.