Our understanding of the spectral nature of the neglected tropical disease leishmaniasis, and of host-parasite interactions in general, remains incomplete. In this work, we used high throughput RNA-sequencing (RNA-seq) to analyze human host and Leishmania gene expression in cutaneous leishmaniasis patients. Skin biopsies were taken from a total of 25 localized cutaneous leishmaniasis (LCL), 6 diffuse cutaneous leishmaniasis (DCL), and 10 healthy patients. LCL separated into groups that lacked detectable parasite transcripts in lesions (PTNeg) and a group in which parasite transcripts were readily detected (PTPos). These groups exhibited substantial differences in host responses to infection, including B lymphocyte presence, B and T cell activation, and immunoglobulin production. Analysis of DCL lesions revealed distinct differences in host responses relative to LCL, including atypical B lymphocyte accumulation, diminished cytotoxic T lymphocyte responses, and an altered macrophage activation state. Surprisingly, neither localized nor diffuse forms of the disease could be correlated with any indication of a Th2 immune response that had previously been implicated in mouse models of L. major susceptibility. The presence of low levels of parasite transcripts in the majority of LCL patients made it difficult to obtain a comprehensive analysis of the parasite transcriptome in LCL. However, high levels of parasite transcripts in DCL afforded a unique opportunity to examine parasite gene expression in this disease. Despite differences in age, gender, and illness duration, there was a remarkable uniformity in parasite gene expression in all 6 DCL patients. We identified transcripts that were highly expressed by all 6 DCL patients, and then curated a subset of conserved genes highly expressed in multiple Leishmania species. These subsets of genes emerge as targets for further research on host-pathogen interactions and a better understanding of Leishmania infection.. In summary, RNA-seq allowed us to fully examine host and parasite transcriptomes, characterize host responses in localized and diffuse cutaneous leishmaniasis lesions, and determine factors that define the variations in disease manifestation. New approaches to modify host immune responses in this disease and new parasite targets for drug development may emerge from this work.