Background. Cutaneous leishmaniasis is an inflammatory parasitic infection characterized by superficial and deep perivascular infiltration with or without granuloma formation. Clinical diagnosis usually requires seeing Leishmania bodies. Methods. We report two cases of cutaneous leishmaniasis with unusual histological finding of panniculitis. Case 1: a 36-year-old male presented with multiple ulcerative nodules involving the left leg for two months duration which was greatly responsive to antimony intralesional therapy. Case 2: A 45-year-old woman presented with painless nodules on her upper chest of a 10-week duration which were successfully treated with oral and topical zinc sulphate. Results. Diagnosis of both cases was confirmed by finding the Leishmania bodies with Gimesa stain in addition to the diffuse dermal inflammatory cellular infiltration of the dermis forming granulomatous dermatitis. Mixed cellular infiltration of lymphocytes, histiocytes, and plasma cells of the panniculus caused both septal and lobular panniculitis. Conclusion. Cutaneous leishmaniasis can cause panniculitis and this could be seen more commonly if deep biopsies were taken. So cutaneous leishmaniasis must be considered in evaluating pathology of panniculitis especially in endemic regions.