Urban sanitation necessitates management of fecal sludge inside and outside the household. This study examined associations between household sanitation, fecal contamination, and enteric infection in two low-income neighborhoods in Vellore, India. Surveys and spatial analysis assessed the presence and clustering of toilets and fecal sludge management (FSM) practices in 200 households. Fecal contamination was measured in environmental samples from 50 households and household drains. Enteric infection was assessed from stool specimens from children under 5 years of age in these households. The two neighborhoods differed significantly in toilet coverage (78% versus 33%) and spatial clustering. Overall, 49% of toilets discharged directly into open drains (“poor FSM”). Children in households with poor FSM had 3.78 times higher prevalence of enteric infection when compared with children in other households, even those without toilets. In the neighborhood with high coverage of household toilets, children in households with poor FSM had 10 times higher prevalence of enteric infection than other children in the neighborhood and drains in poor FSM clusters who had significantly higher concentrations of genogroup II norovirus. Conversely, children in households with a toilet that contained excreta in a tank onsite had 55% lower prevalence of enteric infection compared with the rest of the study area. Notably, households with a toilet in the neighborhood with low toilet coverage had more fecal contamination on floors where children played compared with those without a toilet. Overall, both toilet coverage levels and FSM were associated with environmental fecal contamination and, subsequently, enteric infection prevalence in this urban setting.