Treatment failure and parasite drug susceptibility in dermal leishmaniasis caused by Leishmania (Viannia) species are poorly understood. Prospective evaluation of drug susceptibility of strains isolated from individual patients before drug exposure and at clinical failure allows intrinsic and acquired differences in susceptibility to be discerned and analyzed. To determine whether intrinsic susceptibility or loss of susceptibility to miltefosine contributed to treatment failure, we evaluated the miltefosine susceptibility of intracellular amastigotes and promastigotes of six Leishmania (Viannia) braziliensis and six Leishmania (Viannia) panamensis strains isolated sequentially, at diagnosis and treatment failure, from two children and four adults ≥55 years old with concurrent conditions. Four patients presented only cutaneous lesions, one had mucosal disease, and one had disseminated mucocutaneous disease. Expression of the Leishmania drug transporter genes abca2, abca3, abcc2, abcc3, abcg4, abcg6, and LbMT was evaluated by quantitative reverse transcription-PCR (qRT-PCR). Intracellular amastigotes (median 50% effective concentration [EC50], 10.7 μmol/liter) were more susceptible to miltefosine than promastigotes (median EC50, 55.3 μmol/liter) (P < 0.0001). Loss of susceptibility at failure, demonstrated by a miltefosine EC50 of >32 μmol/liter (the upper limit of intracellular amastigote assay), occurred in L. panamensis infection in a child and in L. braziliensis infection in an adult and was accompanied by decreased expression of the miltefosine transporter LbMT (LbMT/β-tubulin, 0.42- to 0.26-fold [P = 0.039] and 0.70- to 0.57-fold [P = 0.009], respectively). LbMT gene polymorphisms were not associated with susceptibility phenotype. Leishmania ABCA3 transporter expression was inversely correlated with miltefosine susceptibility (r = -0.605; P = 0.037). Loss of susceptibility is one of multiple factors involved in failure of miltefosine treatment in dermal leishmaniasis.