Leishmania (Viannia) parasites are etiological agents of cutaneous leishmaniasis in the New World. Infection is characterized by a mixed Th1/Th2 inflammatory response, which contributes to disease pathology. However, the role of T regulatory cells (Treg) in Leishmania (Viannia) disease pathogenesis is unclear. Using the mouse model of chronic L. (V.) panamensis infection, we have examined the hypothesis that Treg functionality contributes to control of pathogenesis. Upon infection, T regulatory cells (CD4+Foxp3+) presented with a dysregulated phenotype, in that they produced IFN-γ, expressed Tbet and had a reduced ability to suppress T cell proliferation in vitro. Targeted ablation of Tregs resulted in enlarged lesions, increased parasite load and enhanced production of IL-17 and IFN-γ with no change in IL-10 and IL-13 levels. Thus, indicating that an increased inflammatory response was commensurate with disease exacerbation and that the remaining impaired Treg cells were important in regulation of disease pathology. Conversely, adoptive transfer of Tregs from naïve mice halted disease progression, lowered parasite burden and reduced cytokine production (IL-10, IL-13, IL-17, IFN-γ). As Tregs appeared important for controlling infection, we hypothesized the expansion of Tregs could be used as an immunotherapeutic treatment approach. As a proof of principle, chronically infected mice were treated with rIL-2-anti-IL-2 antibody complex to expand Tregs. Treatment transitorily increased numbers and percentage of Treg (draining lymph node, spleen), that resulted in reduced cytokine responses, ameliorated lesions and reduced parasite load (105-fold). Thus, immunotherapy targeting Tregs could provide an alternate treatment strategy for leishmaniasis caused by L. (Viannia) parasites.