Despite the wealth of information on the prevalence and correlates of canine Leishmania infection (CLI), data on its incidence are still sparse, and little is known regarding risk factors for CLI. We studied a cohort of dogs in an urban area in Brazil to determine whether incidence varied with age, breed, and environmental characteristics. The mean follow-up was 1.5 years, and the crude incidence rate was 11.8 cases/100 dog-years (95% confidence interval [CI] = 8.6-15.6). In the multivariate analysis, short fur was the strongest predictor of CLI (relative risk [RR] = 9.4). In addition, our data indicate that raising pigs (RR = 4.1), chickens (RR = 3.3), or other livestock (RR = 2.6) significantly increased the risk of CLI. Thus, suggesting control measures directed towards modifying the environmental factors favoring contact between vectors, reservoirs, and susceptible humans, such as proximity to pigpens or hen houses. Furthermore, conventional control programs of insecticidal spraying of human dwellings should also apply insecticide in and around animal sheds.