Livestock guardian dogs (LGDs) are efficient at controlling predation upon livestock. LGDs create a safer landscape for livestock through accompaniment and the reduction of the abundance and distribution of wild carnivores. However, the effects of LGDs on livestock behavior, group dynamics, and use of space remain understudied. To understand LGDs’ impact on sheep behavior and group dynamics, and using a natural experiment approach, we worked on two sheep farms that differed in the use of LGDs to control predation. We used the focal sampling technique to observe sheep behavior; in addition, we obtained information about group size and nearest neighbor distance. Nutritional quality and habitat selection were also assessed. For each individual, we calculated the proportion of time invested in behavioral categories (scanning, feeding, resting, and traveling), and categories between properties were contrasted with the nonparametric U-test, as well as features related to group dynamics, vegetation structure, and food quality. Furthermore, we investigated the effect of LGDs and other management and biological variables on sheep behavior and group properties. In close proximity to LGDs, sheep spent more time in scanning while time allocated to feeding decreased; however, feeding time did not change based on its presence. Moreover, LGDs’ company led to the formation of larger sheep groups and individuals closer to each other. Sheep together with LGDs selected habitats with limited plant cover, which allows animals greater visibility. Lastly, we suggest that the ability of LGDs to maintain larger and more cohesive groups in open areas, as well as with more vigilant animals, could increase livestock responsiveness to predator presence, thus helping to reduce probability of predation on sheep and, in consequence, reducing the necessity of killing wild species in retaliation.