The objective of this study was to investigate the incidence and occurrence of aflatoxin M1 (AFM1) in Brazilian milk and infant formula. The distribution and stability of AFM1 in cheese and yoghurt were also determined. Milk samples and infant formula samples were purchased in Ribeirão Preto-SP, Brazil and were analyzed for AFM1 using immunoaffinity column purification, liquid chromatography separation and fluorescence detection. AFM1 was detected in 83% of the milk samples (>3 ng/kg) with levels ranging from 8 to 437 ng/kg for fluid milk, and 20–760 ng/kg for powdered milk. No AFM1 was found in infant formula. Processing and storage was shown to have little effect on AFM1 content in milk and milk products. Total AFM1 mass in milk was reduced by 3.2% in cheese and by 6% in yoghurt (pH 4.4). The mean concentration of AFM1 in curds was 1.9-fold higher and whey was 0.6-fold lower than in unprocessed milk.