The multifactorial basis of therapeutic response can obscure the relation between antimicrobial drug susceptibility and clinical outcome. To discern the relationship between parasite susceptibility to meglumine antimoniate (SbV) and therapeutic outcome of cutaneous leishmaniasis, risk factors for treatment failure were considered in evaluating this relationship in ninety-one cutaneous leishmaniasis patients and corresponding clinical strains of Leishmania (Viannia) panamensis. Parasite susceptibility to 32 μg SbV/mL (plasma Cmax) was evaluated in primary human macrophages, PBMCs, and U937 macrophages. Early parasitological response to treatment was determined in lesions of a subgroup of patients, and pathogenicity of Sb-resistant and sensitive clinical strains was compared in BALB/c mice. Parasite survival in cell models and patient lesions was determined by qRT-PCR of Leishmania 7SLRNA transcript. Parasite loads in BALB/c mice were quantified by limiting dilution analysis. The disparate Sb-susceptibility of parasite subpopulations distinguished by isoenzyme profiles (zymodemes) was manifest in all cell models. Notably, Sb-resistance defined by parasite survival, was most effectively discerned in U937 macrophages compared with primary human host cells, significantly higher among strains from patients who failed treatment than cured and, significantly associated with treatment failure. Each unit increase in transformed survival rate corresponded to a 10.6-fold rise in the odds of treatment failure. Furthermore, treatment failure was significantly associated with naturally Sb-resistant zymodeme 2.3 strains, which also produced larger lesions and parasite burdens in BALB/c mice than Sb-sensitive zymodeme 2.2 strains. The confounding effect of host risk factors for treatment failure in discerning this association was evidenced in comparing strains from patients with and without the defined risk factors for treatment failure. These results establish the association of natural resistance to meglumine antimoniate with treatment failure, the importance of host risk factors in evaluating drug susceptibility and treatment outcome, and the clinical and epidemiological relevance of natural Sb-resistance in L. (V.) panamensis subpopulations.