Background The Benishangul-Gumuz region is an important development corridor in Ethiopia. Large-scale projects such as the Great Renaissance Dam, mining and agriculture have entailed huge environmental modifications and settlement pattern changes. There is no detailed epidemiological information on visceral leishmaniasis (VL) in the region. Materials and methods A cross-sectional study was carried out to assess the epidemiology and risk factors associated with Leishmania infection. A leishmanin skin test (LST) was done for 1342 participants, and for 253 of them rK39 and DAT were carried out. Thirty-six dogs owned by households with LST-positive member(s) were rK39 and DAT tested. A pretested questionnaire was used to capture individual and household characteristics. Results Of the 89.2% (1197/1342) who availed themselves of the LST reading, 6.0% were positive. The rk39 and DAT positivity among the 253 tested were 3.2% and 5.9%, respectively. In dogs, positivity rates by rK39 and DAT were 13.9% and 5.6%, respectively. Of the household and individual risk factors, presence of a dog in the household (P = 0.005), male sex (0.003), residence woreda (0.000) and occupation (0.023) showed a strong positive association with LST positivity. Individuals who lived in households that had dogs were 2.6 times more likely to be LST positive (AOR = 2.6; 95% CI = 1.54, 4.40). Being female decreased the probability of being LST positive by 0.38 times (AOR = 0.38; 95% CI = 0.20, 0.72). People living in Guba and Kurmuk had 4.7 (AOR = 4.74, 95% CI 1.83, 12.31) and 5.9 (AOR = 5.85, 95% CI 2.27, 15.09) times more risk of being infected. Conclusions We demonstrated the presence of active VL transmission in the areas. Thus, we underline the need to establish the responsible vector(s) and reservoir(s) for comprehensive early containment plans to prevent potentially harmful public health and economic consequences.