This study was a randomized, open label comparison that was designed to determine efficacy and safety of miltefosine as the first oral drug for the treatment of zoonotic cutaneous leishmaniasis caused by Leishmania major in comparison with meglumine antimoniate. Complete clinical response was defined as 100% re-epithelialization of the lesion. Definitions of lesion cure and failure were based on both clinical and parasitological criteria two weeks after the end of treatment and clinical recovery three months after this period. Of 32 patients enrolled for miltefosine treatment 28 patients completed treatment, of which 26 were cured at three months, corresponding to a cure rate of 92.9% on a per protocol analysis, and 81.3% according to intention to treat analysis. There was one failure (3.1%), one relapse (3.1%) and four dropouts due to lack of tolerability (12.5%) during the first week of treatment. Of 31 patients who received intramuscular meglumine antimoniate (20mgSb(5)/kg body weight daily for 14 days) 25 were cured (83.3% on a per protocol basis, 80.6% on intention to treat basis), five failed (16.1%) and one was lost (3.2%) at 3-month follow-up. At 6-month follow-up after the end of treatment, no relapse was observed. Both regimens were tolerated but averages of nausea (32.2%) and vomiting (21.5%) were observed in patients during two weeks after initiation of miltefosine treatment. Other gastrointestinal, musculoskeletal, and total adverse events were not statistically different in the two groups during one to four weeks after therapy initiation. No relevant changes were observed in levels of liver enzymes, creatinine and hematological tests before and after end of treatment in both groups. In conclusion, miltefosine is apparently at least as good as meglumine antimoniate for the treatment of cutaneous leishmaniasis caused by L. major in Iran, based on parasitological as well as clinical criteria two weeks, three months, and six months after end of treatment.