A total of 150 patients of kala-azar matched for age and sex and parasitologically proved were randomly allocated to two equal treatment groups. Patients in one group received amphotericin B(AMB) in a dose of 1 mg/kg body weight (BW) on alternate days starting with 0.05 mg/kg/bw on first day with daily increments, till a total dose of 20 mg/kg/bw was given; the patients in the second group received sodium stibogluconate (SAG) in the dose of 20 mg/kg/bw, im daily for 30 days. The efficacy, safety and cost-effectiveness of the two drugs were compared. Apparent cure (afebrile at the end of therapy) in 75 (100%) and 69 (92%) patients and ultimate cure (no relapse in six months of follow up) in 75 (100%) and 60 (80%) patients occurred in the AMB and SAG groups respectively. The difference between the ultimate cure in the two groups was significant (P < 0.001). Six (8%) and 9(12%) patients of SAG group showed primary (with no response to SAG during treatment) and secondary unresponsiveness (with no response to SAG after relapse) respectively and they were cured with amphotericin B.(ABSTRACT TRUNCATED AT 250 WORDS)