Summary1. Free-ranging domestic dogs are the world's most common carnivore and can negatively interact with native wildlife at multiple levels. Yet the intraguild competitive effects of dogs on the distribution and habitat use of native carnivores are poorly known, especially in areas of conservation concern. 2. We examined the spatial distribution of sympatric populations of radiocollared Indian foxes and free-ranging dogs to determine if Indian foxes alter their habitat use in the presence of dogs. We tested the effects of landcover type, primary prey abundance (rodents) and the presence of dogs as predictors of Indian fox spatial distribution in a threatened grassland habitat in central India. 3. By counting rodent burrows, we determined that the relative abundance of rodents was higher in fallow land and agricultural land compared to natural grasslands. From radiotelemetry data, we determined that the presence of dogs was closely linked to human-modified habitats, such as agricultural land and human settlements. 4. Top ranked models, based on Akaike's Information Criterion corrected for small sample size, indicated that the negative effects of the presence of dogs and agricultural land, and the positive effects of the presence of grassland and fallow land habitats were the strongest predictors of Indian fox spatial distribution. Thus, the use of the landscape by Indian foxes was determined not only by habitat type, but also by the presence of a mid-sized carnivore, the dog. 5. Synthesis and applications. Our results show that the presence of domestic dogs on the periphery of natural habitats can interfere with the spatial distribution of a sympatric carnivore. Vaccination and sterilization programmes, aimed at reducing population sizes and pathogen prevalence, do not restrict the free-ranging behaviour of dogs. Therefore, in areas of conservation value, control of free-ranging dogs would be required to fully mitigate the deleterious effects of dogs on native carnivores and other wildlife.