Leishmania RNA virus (LRV) is an important virulence factor associated with the development of mucocutaneous Leishmaniasis, a severe form of the disease. LRV-mediated disease exacerbation relies on TLR3 activation, but downstream mechanisms remain largely unexplored. Here, we combine human and mouse data to demonstrate that LRV triggers TLR3 and TRIF to induce type I IFN production, which induces autophagy. This process results in ATG5-mediated degradation of NLRP3 and ASC, thereby limiting NLRP3 inflammasome activation in macrophages. Consistent with the known restricting role of NLRP3 for Leishmania replication, the signaling pathway triggered by LRV results in increased parasite survival and disease progression. In support of this data, we find that lesions in patients infected with LRV+ Leishmania are associated with reduced inflammasome activation and the development of mucocutaneous disease. Our findings reveal the mechanisms triggered by LRV that contribute to the development of the debilitating mucocutaneous form of Leishmaniasis.