BackgroundCurrently, there is no topical treatment available for any form of cutaneous leishmaniasis (CL) in most of the endemic areas. The aim of the current study was to develop a topical nano-liposomal Amphotericin B (AmB) for the treatment of CL.Methodology/principal findingsLiposomes containing 0.1, 0.2 and 0.4% AmB (Lip-AmB) were formulated and characterized for the size, entrapment efficiency, long term stability, and skin penetration properties using Franz diffusion cells. Liposomes diameters were around 100 nm with no change during more than 20 months’ storage either at 4 °C or at room temperature. Franz diffusion cells studies showed that almost 4% of the applied formulations penetrated across the skin and the highest skin retention (73.92%) observed with Lip-AmB 0.4%. The median effective doses (ED50), the doses of AmB required to kill 50% of L. major amastigotes were 0.151, 0.151, and 0.0856 (μg/mL) in Lip-AmB 0.1, 0.2, 0.4%, respectively. Lip-AmB 0.4% caused 80% reduction in fluorescence intensity of GFP+ L. tropica infected macrophages at 5 μg/mL of AmB concentration. Topical Lip-AmB was applied twice a day for 4 weeks to the skin of BALB/c mice to treat lesions caused by L. major. Results showed the superiority of Lip-AmB 0.4% compared to Lip-AmB 0.2 and 0.1%. The parasite was completely cleared from the skin site of infection and spleens at week 8 and 12 post-infection in mice treated with Lip-AmB 0.4%. The results suggest that topical Lip-AmB 0.4% may be a useful tool in the treatment of CL and merits further investigation.