Despite a plethora of publications on the murine model of cutaneous leishmaniasis and their contribution to our understanding of the factors that regulate the development of CD4+ T cell immunity in vivo, there is still no effective vaccine against the human disease. While recovery from natural or experimental infection with Leishmania major, the causative agent of human cutaneous leishmaniasis, results in persistence of parasites at the primary infection site and the development of long-lasting immunity to reinfection, vaccination with killed parasites or recombinant proteins induces only short-term protection. The reasons for the difference in protective immunity following recovery from live infection and vaccination with heat-killed parasites are not known. This may in part be related to persistence of live parasites following healing of primary cutaneous lesions, because complete clearance of parasites leads to rapid loss of infection-induced immunity. Recent reports indicate that in addition to persistent parasites, IL-10-producing natural regulatory T cells may also play critical roles in the maintenance and loss of infection-induced immunity. This review focuses on current understanding of the factors that regulate the development, maintenance and loss of anti-Leishmania memory responses and highlights the role of persistent parasites and regulatory T cells in this process. Understanding these factors is crucial for designing effective vaccines and vaccination strategies against cutaneous leishmaniasis.