Leather is a Ghost of Tsushima crafting material found while exploring the world by clearing Mongol territories and camps, but you can also get it when you complete Side Tales. The Leather is needed to improve Jin’s attire and armor. Linen and Silk are two materials similar to this type of cloth.
As a crafting material, along with other types of cloth, Leather is used to upgrade Jin’s armor at any Armorer in a friendly village. When a new upgrade is available, you will see the icons of those villages glowing yellow on your map.
Where To Find Leather in Ghost of Tsushima
This material can be considered the equivalent of the Yew Wood and Steel, meaning that it is uncommon, except that it is used to upgrade Jin’s attire and armor. As you can see in the picture above, you will be able to get it as a reward for finishing Side Tales.
You can also find a lot of Leather around Mongol sleeping quarters, usually inside larger compounds. Look around and fully investigate each area you liberate. Or, you can simply buy it from Trappers. The one in Yarikawa Stronghold, for example, will trade this material for Supplies.