Fungal skin infections caused by dermatophytes are of significant veterinary and zoonotic concern. This study investigated the prevalence, risk factors, and treatment outcomes of dermatophytosis in dogs and cats with skin lesions. A total of 140 animals (90 dogs and 50 cats) that presented with skin lesions (alopecia, crusts, pruritus, and scales) were examined. Identification of dermatophyte isolates relied on both phenotypic characteristics and molecular techniques. The molecular approach involved PCR and sequencing of ribosomal DNA regions (ITS1, ITS2, and 5.8S rDNA), complemented by Restriction Fragment Length Polymorphism (RFLP). Treatment regimens included topical clotrimazole, systemic itraconazole, supportive therapy, and a dermatophyte vaccine. Of the 90 dog samples examined, 47 (52.22%) were positive for fungal culture (p = 0.65). In cats, 35 samples (70%) were positive (p < 0.0001). Microsporum canis was the most significant (p < 0.0001) prevalent isolate (60%), followed by Trichophyton mentagrophytes (20%). This study reported the first isolation of T. indotineae in Egypt. Younger animals (<1 year) exhibited a significantly (p < 0.05) higher risk of infection compared with adults (>1 year). Indoor/outdoor housing in cats significantly reduced the risk of infection when compared with indoor housing (p < 0.0001; odds ratio = 0.05). Combination therapy using itraconazole, clotrimazole, supportive treatment, and a dermatophyte vaccine resulted in the fastest clinical recovery (p < 0.0001). These findings underscore the importance of accurate diagnosis and effective treatment strategies for managing dermatophytosis in pets and preventing zoonotic transmission.