Female phlebotomine sand flies Lutzomyia longipalpis naturally harbor populations of the medically important Leishmania infantum (syn. Leishmania chagasi) parasite in the gut, but the extent to which the parasite interacts with the immune system of the insect vector is unknown. To investigate the sand fly immune response and its interaction with the Leishmania parasite, we identified a homologue for caspar, a negative regulator of immune deficiency signaling pathway. We found that feeding antibiotics to adult female L. longipalpis resulted in an up-regulation of caspar expression relative to controls. caspar was differentially expressed when females were fed on gram-negative and gram-positive bacterial species. caspar expression was significantly down-regulated in females between 3 and 6 days after a blood feed containing Leishmania mexicana amastigotes. RNA interference was used to deplete caspar expression in female L. longipalpis, which were subsequently fed with Leishmania in a blood meal. Sand fly gut populations of both L. mexicana and L. infantum were significantly reduced in caspar-depleted females. The prevalence of L. infantum infection in the females fell from 85 to 45%. Our results provide the first insight into the operation of immune homeostasis in phlebotomine sand flies during the growth of bacterial and Leishmania populations in the digestive tract. We have demonstrated that the activation of the sand fly immune system, via depletion of a single gene, can lead to the abortion of Leishmania development and the disruption of transmission by the phlebotomine sand fly.