Phlebotomus papatasi is one of the most medically important sand fly species in the Old World, serving as a vector of Leishmania parasites and phleboviruses. Chemical control is still considered the most effective method for rapidly reducing populations of flying insects involved in vector-borne disease transmission, but is increasingly threatened by insecticide resistance in the target insect posing significant problems for entomologists responsible for control programs. This study was conducted to determine pyrethroid resistance mechanisms and the biological, physiological, and molecular impacts of resistance in Ph. papatasi, and to compare their resistance mechanisms against those reported for mosquitoes and other intensely studied dipterans. Field-collected Ph. papatasi from Aswan, Egypt, were subjected to sublethal doses of permethrin and reared as a resistant strain under laboratory conditions through 16 generations. Biological parameter observations of resistant Ph. papatasi revealed an association of resistance with productivity cost. Physiological analysis revealed that concentrations of oxidase and esterase enzymes increased in early generations of the resistant colony, and then subsided through the F16 generation to levels similar to those in a susceptible colony. The activity levels of acetylcholinesterase were higher in field-collected Ph. papatasi than in susceptible colony flies, but decreased significantly despite subsequent exposure to permethrin. The molecular search for gene mutations in the resistant strain of Ph. papatasi failed to identify any mutations common in pyrethroid-resistant mosquitoes. Our study revealed that the mechanism of pyrethroid resistance in sand flies is different than that in mosquitoes, at least at the genetic level.