Cryptosporidium, faecal indicator organisms and physical and chemical water quality variables were monitored in a small mixed rural–urban watershed in southeastern Brazil. Cryptosporidium was present in 43% of 117 water samples analysed by microscopy. Concentrations varied from non-detects to 14 oocysts L−1. All samples were further analysed by nested-PCR, and Cryptosporidium spp. were detected in 24% (28) of them. Sequencing at the 18S rRNA locus gave high quality sequences in eight samples, revealing the presence of Cryptosporidium parvum. Cryptosporidium was not correlated with faecal indicator organisms (total coliforms, Escherichia coli, Enterococcus and coliphages), nor with physical and chemical water quality variables (e.g. turbidity, electrical conductivity and chemical oxygen demand), but it was with farm animal density (number of animals per ha). Land use mapping reinforced the suggestions from Cryptosporidium genotyping that both animals (livestock) and humans are potential sources to environmental contamination with oocysts within the watershed.