Aflatoxins (AFs) are a group of mycotoxins produced by certain fungi of Aspergillus spp. AFs of major concern are B1 (AFB1), B2 (AFB2), G1 (AFG1), G2 (AFG2), and M1 (AFM1). AFM1 is a hydroxylated metabolite of AFB1 formed inside the animal's body which is excreted into milk of cows that consumed AFB1 contaminated feed. Consumption of AFM1-contaminated milk and subsequent dairy products causes negative health effects in consumers. This study was conducted to determine the occurrence and levels of AFM1 in cheese products available in the Sri Lankan market where AFM1 is not regularly monitored in milk while having an outdated regulatory limit of 1 ppb established for dairy products. Processed cheese (n = 28), hard cheese (n = 14), semi-hard cheese (n = 5), and soft cheese (n = 3) representing seven popular brands were collected. The samples were analyzed by Ultra High-Performance Liquid Chromatography Fluorescence Detection. AFM1 was detected in 40 samples (80 %), while 17 (34 %) and 37 (74 %) of the samples had AFM1 levels exceeding the maximum permitted limit set by Codex Alimentarius Commission (0.5 ppb) and the Netherlands (0.2 ppb). Further, 10 samples violated the Sri Lankan maximum limit of 1 ppb. Thirteen out of the 14 hard cheese (92.9 %, 0.11–14.43 ppb) and all semi-hard cheese samples (100 %, 0.29–0.65 ppb) contained AFM1. Most of the soft (66.7 %, 0.35–0.45 ppb) and processed (71.4 %, 0.11–1.35 ppb) cheese samples had AFM1. Most of the locally manufactured cheese products in Sri Lankan market may pose health risks to consumers. The results highlight the significance of regular monitoring of AFM1 in dairy products and the importance of updating regulations on par with international standards concurrently to ensure consumer safety.