An outbreak of cutaneous leishmaniasis in a small rural settlement, located in the Southern of São Paulo State - Brazil was observed. This region has basic agricultural activities, and has no forests. Two hundred and thirty one persons were evaluated, and the following aspects were observed: 1) 67 individuals (29%) had skin lesions, confirmed by histopathologic study and the Montenegro skin test; 2) of these cases, 40 (59.7%) were males; 3) The youngest patients were 2 years (5 cases), and the oldest, 86 (1 case); 4) the following types of cutaneous lesions, were observed: a) 54 cases (80.6%) had ulcers, 13 (19.4%) had nodules, 4 (5.9%) had verrucose lesions, and 3 (4.4%) had typical scars. In all the cases, the parasite identified was Leishmania (Viannia) braziliensis. The vector captured in the region was Lutzomyia intermedia, a strong anthropophilic sandfly very frequently observed in São Paulo. This study shows that apart from the well-known outbreak observed in the forest environments, leishmaniasis can be transmitted within or around dwellings.