Macrophages and monocytes are important for clearance of Leishmania infections. However, immune evasion tactics employed by the parasite results in suppressed inflammatory responses, marked by deficient macrophage functions and increased accumulation of monocytes. This results in an ineffective ability to clear parasite loads. Allograft Inflammatory Factor-1 (AIF1) is expressed in myeloid cells and serves to promote immune responses. However, AIF1 involvement in monocyte and macrophage functions during parasitic infections has not been explored. This study now shows that Leishmania donovani inhibits AIF1 expression in macrophages to block pro-inflammatory responses. Mice challenged with the parasite had markedly reduced AIF1 expression in splenic macrophages. Follow-up studies using in vitro approaches confirmed that L. donovani infection in macrophages suppresses AIF1 expression, which correlated with reduction in pro-inflammatory cytokine production and increased parasite load. Ectopic overexpression of AIF1 in macrophages provided protection from infection, marked by robust pro-inflammatory cytokine production and efficient pathogen clearance. Further investigations found that inhibiting AIF1 expression in bone marrow cells or monocytes impaired differentiation into functional macrophages. Collectively, results show that AIF1 is a critical regulatory component governing monocyte and macrophage immune functions and that L. donovani infection can suppress the gene as an immune evasion tactic.