Despite their medical importance, natural breeding sites of sand flies have been poorly explored. Detecting such sites is imperative in vector control strategies. This study aimed to identify potential breeding and resting microhabitats of sand flies and household risk factors associated with cutaneous leishmaniasis transmission in Dir districts, Khyber Pakhtunkhwa, Pakistan. Survey of indoor and outdoor habitats in four tehsils (subdistricts) of upper and lower Dir districts was carried out using sticky traps, flit method, and aspirator. To assess risk factors associated with cutaneous leishmaniasis (CL), questionnaires were administered to household heads. Mud houses and plants belonging to Cucurbitaceae family sheltered highest number of sand flies. Excessive number of flies were collected from indoor sites (common rooms used for both people and animals) compared to outdoor habitats (cattle dungs). Phlebotomus salangensis Artemiev, 1978 and Phlebotomus sergenti were the most widely distributed species, while Sergentomyia bailyi peaked in caves with high organic content in soil. Roof material and ownership of fans were associated with significant risk of CL. Findings of this study present a list of potential breeding sites for sand flies and CL risk factors that can be targeted and implemented in control programs for CL. Further studies are required to elucidate the breeding behavior and preferences of these medically important vectors.