Leflunomide was recently approved for the treatment of rheumatoid arthritis. Its role in the treatment of psoriasis and psoriatic arthritis is unclear. Twelve consecutive psoriatic arthritis patients who had not responded to at least one disease modifying anti-rheumatic drug (DMARD) were started on leflunomide alone or in addition to another DMARD. Global assessment of improvement in psoriasis and psoriatic arthritis by the treating rheumatologist was scored on a 0–3 scale. After 2–3 months of treatment, 8 patients had moderate to marked improvement in both psoriasis and psoriatic arthritis. The improvement in modified tender joint counts, patient’s global assessments, and grip strengths was statistically significant. However, physicians’ global assessments and the modified swollen joint counts did not reach a significant difference. Three patients whose toxicity necessitated the temporary discontinuation of the drug were able to resume the drug at lower dosage with clinical benefit. Leflunomide may prove to be a useful agent for the treatment of recalcitrant cases of psoriasis and psoriatic arthritis.