This paper presents the first assessment of dietary exposure to aflatoxin M1 (AFM1) and associated health risks through milk and dairy product consumption in Armenia. Data on AFM1 in raw milk were obtained from an annual residue monitoring program. Additionally, commonly consumed dairy products (pasteurized milk, cheese, sour cream, curd cheese) were sampled, considering the sources of raw milk used by dairy companies. Per capita consumption of raw milk was sourced from national food balance databases, while individual consumption data for dairy products was collected via a 24 h recall survey with 1400 adult respondents. Detectable levels of AFM1 were observed in 7.14% of raw milk samples (up to 0.334 μg/kg) and, albeit at lower amounts (up to 0.009 µg/kg), in 30% and 40% of sour cream and curd cheese, respectively. The AFM1 levels were lower than the national maximum permitted level (0.5 μg/kg); however, levels in raw milk exceeded the EU ML (0.05 μg/kg). The estimated margin of exposure values for dairy products indicated no significant risk, whereas a reasonable worst-case estimate, using the measurable levels of AFM1 in raw milk consumption indicated a potential public health concern. This study provides a scientific basis for evaluating aflatoxin issues in the Caucasus area.