BACKGROUND: The emergence of American Cutaneous Leishmaniasis (ACL) has been associated with changes in the relationship between people and forests, leading to the view that forest ecosystems increase infection risk and subsequent proposal that deforestation could reduce re-emergence of this disease. METHODOLOGY/PRINCIPAL FINDINGS: We analyzed county-level incidence rates of ACL in Costa Rica (1996-2000) as a function of social and environmental variables relevant to transmission ecology with statistical models that incorporate breakpoints. Once social marginality was taken into account, the effect of living close to a forest on infection risk was small, and diminished exponentially above a breakpoint. Forest cover was associated with the modulation of temporal effects of El Nino Southern Oscillation (ENSO) at small spatial scales, revealing an additional complex interplay of environmental forces and disease patterns. CONCLUSIONS/SIGNIFICANCE: Social factors, which previously have not been evaluated rigorously together with environmental and climatic factors, appear to play a critical role that may ultimately determine disease risk.