Global declines of carnivores are related to difficult integration with human land use, in particular conflicts caused by livestock depredation. Spotted hyenas (Crocuta crocuta) live in remarkably close proximity to humans in the degraded and prey-depleted Enderta district, northern Ethiopia. Their diet and interaction with people were investigated in sub-districts close to the regional capital, Mekelle. We interviewed 1,686 randomly selected households from three sub-districts, Debri, Aynalem, and Felege Selam, about livestock management and incidence of depredation from 2005 to 2009. Livestock loss amounted to 492 heads over 5 years; an annual mean of 0.6% worth US$ 7,042. We also performed a survey giving a minimum population estimate of 60 hyenas in the three sub-districts; all but four were found in church forests where they are traditionally tolerated and protected. A total of 1,200 hyena scats were analyzed to determine prey species; the diet contained only domestic species, with sheep being by far the most common prey species. About 5.5% of fecal analysis contained human hairs. We conclude that hyenas depended entirely on domestic prey species, partly through depredation but more importantly through scavenging on (peri-) urban waste. Under the particular local circumstances, continued coexistence appears possible, provided that damage remains tolerable.