A substantial number of patients who recover from kala-azar will develop dermatosis [commonly known as post-kala-azar dermal leishmaniasis (PKDL)]. It usually occurs in the Indian subcontinent and East Africa. As many as 10-20% of Indian cases and 50-60% of Sudanese cases develop PKDL after successful treatment of visceral leishmaniasis. Most cases occur after infection with Leishmania donovani and less commonly after Leishmania infantum. However, the PKDL is extremely rare in patients infected with Leishmania chagasi. Though exact pathology is not yet fully known, here we review various evidence, which suggest that the pathogenesis is largely immunologically mediated. Our group has been of the opinion that PKDL disease manifestation is a result of in-vivo generation of quasi-species either as in-vivo hybridization of various circulating and latent populations of the causative species within the host cells or due to external reinfection. We, and other scientists, have recently demonstrated that strains of Leishmania that cause visceral diseases differ genetically from those that cause PKDL. We feel that this review will incite interest in several parasitologists and molecular biologists in the pathogenesis of this important manifestation of the infection, often blamed as the source of outbreaks of leishmaniasis.