Infection of C57BL/6 mice with most L. major strains results in a healing lesion and clearance of parasites from the skin. Infection of C57BL/6 mice with the L. major Seidman strain (LmSd) isolated from a patient with chronic lesions, despite eliciting a strong Th1 response, results in a non-healing lesion, poor parasite clearance, and complete destruction of the ear dermis. We show here that in comparison to a healing strain, LmSd elicited early upregulation of IL-1β mRNA and IL-1β producing dermal cells and prominent neutrophils recruitment to the infected skin. Mice deficient in Nlrp3, ASC, and caspase-1/11, or lacking IL-1β or IL-1 receptor signaling, developed healing lesions and cleared LmSd from the site. Resistance to LmSd mice was associated with a stronger antigen-specific Th1 response. The possibility that IL-1β might act through neutrophil recruitment to locally suppress immunity was supported by the healing phenotype observed in neutropenic Genista mice. Secretion of mature IL-1β by LmSd infected macrophages in vitro was dependent on activation of the Nlrp3 inflammasome and caspase-1. These data reveal that Nlrp3 inflammasome dependent IL-1β, associated with localized neutrophil recruitment, plays a crucial role in the development of a non-healing form of cutaneous leishmaniasis in conventionally resistant mice.