Cystic echinococcosis (CE) caused by larval stage of Echinococcus granulosus, is an endemic zoonosis in Iran particularly in rural regions. The objective of this study was to determine the prevalence of CE among rural communities in Kerman using ultrasonography (US) and serology. Kerman Province, in southeastern Iran, is the largest province, with 2.9 million inhabitants. A sample of 1140 individuals (200 males and 940 females) was selected by randomized cluster sampling in 2006–2008. After acquiring informed consent for each participant a questionnaire was filled, complete abdominal US in supine position was carried out and 5 ml blood was collected for ELISA test. Two hydatid cases (0.2%) were detected by ultrasound. Serological results showed 7.3% seropositivity, and females (8.3%) were significantly more positive than males (2.1%). There were significant difference between CE seropositivity and sex, age and occupation. Residents of desert regions (Shahdad, Andouhjerd and Golbaf) were 2.5 times more likely to be seropositive than mountainous regions with better socioeconomic status (OR = 2.5; 95% CI = 1.09–5.95). Dog ownership does not appear to be a significant risk factor for CE in the region. Only about 10% of households own dogs, usually only one dog. However, the stray dog population of Kerman province is estimated at 145 000–480 000 (3.5–11.5 times the owned dog population). Infection in humans and animals would appear to come mostly from infected stray dogs. Management of stray dog population could make major progress in control of hydatid disease. In addition, proper washing of vegetables decreased probability of infection by 53% (OR = 0.47; 95% CI = 0.26–0.84). The serological study showed that many people, especially women, had been exposed to Echinococcus eggs and had seroconverted but were not infected.