Background and aim: Complications and resistance to pentavalent antimonial agents in cutaneous leishmaniasis, exhibit the need for effective alternative drugs. The aim of this study was to compare the efficacy of oral azithromycin with systemic meglumine antimoniate (Glucantime) in the treatment of cutaneous leishmaniasis. Materials and Methods: Forty-seven patients with cutaneous leishmaniasis visited at the dermatology department of Qaem hospital were randomly divided to two groups. Twenty patients (with 29 lesions) were treated with oral azithromycin 500 mg/day for 5 successive days each month for 4 months and 27 patients (with 58 lesions) were treated with systemic Glucantime 60 mg/kg/day for 20 days. Azithromycin group patients were visited monthly and control group patients were visited in last day of treatment and 45 days later. Results:At the end of our study 10.3% of lesions in azithromycin group showed complete response, 27.6% lesions partial response and 62.1% no response. In Glucantime group 34.5% of lesions showed complete response, 13.8% partial response and 51.7% no response (P=0.036).Conclusion: In treatment of cutaneous leishmaniasis systemic Glucantime is superior to oral azithromycin. Differences between our result and previous studies may be due to difference between strains of Leishmanias and in vitro studies may be necessary to resolve this paradox. On the other hand, change in dosage and course of treatment with azithromycin may affect the efficacy of this agent.