Background In urban settings, the presence of a high density of the human population and contact with domestic and/or stray animals such as dogs and cats can be risk factors for the transmission of zoonotic protozoa parasites. Toxoplasma gondii ( T. gondii ) and Leishmania spp. are zoonotic protozoon parasites with significant health burdens worldwide. Methods A cross-sectional study was used to investigate the antibody prevalence and risk factors of T. gondii and Leishmania spp. infections in 385 randomly selected dogs of Ambo, Bako, and Gojo towns of West Shewa Zone, Oromia regional state, Ethiopia. A questionnaire survey was administered to households to collect data on potential risk factors. Dog sera samples were assayed for T. gondii IgG antibodies using the direct agglutination test while Leishmania spp. specific antibodies tested using an indirect enzyme-linked immunosorbent assay (ELISA). Logistic regression was used for data analysis. Results Overall, T. gondii and Leishmania spp. infection seroprevalence was found to be 82.86% (95% confidence interval (CI): 78.71–86.49%) and 92.47% (95% CI: 89.36–94.90%), respectively. Seropositivity for both T. gondii and Leishmania spp. was found in 82.58% of the dogs. None of the investigated factors were associated with Leishmania spp. seropositivity ( p > 0.05). The seroprevalence of T. gondii was significantly different among the study towns ( p = 0.003). The risk of T. gondii infection was 2.71 times higher in adult dogs than juvenile dogs ( p = 0.043). Dogs kept simultaneously with other domestic animals had increased odds of T. gondii seropositivity compared to those with no other domestic animals (Adjusted Odds ratio: 1.96, p = 0.021). However, altitude, sex, breed, housing, feeding, educational level of head of the household, and dog’s living area were not significantly associated with T. gondii seropositivity ( p > 0.05). Conclusions The high seropositivity and the simultaneous presence of antibodies of T. gondii and Leishmania spp. in dogs suggest the widespread nature of these parasites in the environment and the high potential of transmission to other animals and humans. Further epidemiological studies, isolation and molecular characterization of the parasites, and educational campaigns are suggested.