Sodium stibogluconate (SSG) is the first-line therapy for visceral leishmaniasis (VL) in south-eastern Nepal. Recent studies from the neighbouring state of Bihar, India, have shown a dramatic fall in cure rates with treatment failure occurring in up to 65% of VL patients treated with SSG. A prospective study was conducted at a tertiary-level hospital located in south-eastern Nepal from July 1999 to January 2001. Parasitologically proven kala-azar patients with no previous history of treatment for VL were treated with SSG 20 mg/kg/d for 30 d which was extended to 40 d in those with persistent positive parasitology. Of the 110 patients who completed SSG therapy and were assessed at 1 and 6 months, definite cure was achieved in 99 patients (90%) and SSG failure occurred in 11 patients (10%). Except for the presence of hepatomegaly and a lower platelet count there was no clinical or laboratory baseline characteristic associated with treatment failure. A significantly lower cure rate (76%, P= 0.03) was observed in patients from the district of Saptari, which borders the antimony-resistant VL areas of Bihar. The efficacy of SSG as a first-line treatment for VL in south-eastern Nepal was still satisfactory, except for the patients living closer to the antimony-resistant VL areas of India. These findings indicate that the spread of resistance to antimonials is already taking place in Nepal and that a policy to control further spread should be urgently implemented.