Artemisinin, extracted from a medicinal herb Artemisia annua, is widely used to treat malaria and has shown potent anticancer activity. Artemisinin has been found to be effective against experimental visceral and cutaneous leishmaniasis. Despite extensive research to understand the complex mechanism of resistance to artemisinin, several questions remain unanswered. The artesunate (ART)-resistant line of Leishmania donovani was selected and cellular mechanisms associated with resistance to artemisinin were investigated. ART-resistant (AS-R) parasites showed reduced susceptibility towards ART both at promastigote and amastigote stage compared with ART sensitive (WT) parasites. WT and AS-R parasites were both more susceptible to ART at the early log phase of growth compared with late log phase. AS-R parasites were more infective to the host macrophages (p < 0.05). Evaluation of parasites' tolerance towards host microbicidal mechanisms revealed that AS-R parasites were more tolerant to complement-mediated lysis and nitrosative stress. ROS levels were modulated in presence of ART in AS-R parasites infected macrophages. Interestingly, infection of macrophages by AS-R parasites led to modulated levels of host interleukins, IL-2 and IL-10, in addition to nitric oxide. Additionally, AS-R parasites showed upregulated expression of genes of unfolded protein response pathway including methyltransferase domain-containing protein (HSP40) and flagellar attachment zone protein (prefoldin), that are reported to be associated with ART resistance in Plasmodium falciparum malaria. This study presents in vitro model of artemisinin-resistant Leishmania parasite and cellular mechanisms associated with ART resistance in Leishmania.