Urban population growth in Nigeria may exceed the availability of affordable housing and basic services, resulting in living conditions conducive to vector breeding and heterogeneous malaria transmission. Understanding the link between community-level factors and urban malaria transmission informs targeted interventions. We analyzed Demographic and Health Survey Program cluster-level data, alongside geospatial covariates, to describe variations in malaria prevalence in children under 5 years of age. Univariate and multivariable models explored the relationship between malaria test positivity rates at the cluster level and community-level factors. Generally, malaria test positivity rates in urban areas are low and declining. The factors that best predicted malaria test positivity rates within a multivariable model were post-primary education, wealth quintiles, population density, access to improved housing, child fever treatment-seeking, precipitation, and enhanced vegetation index. Malaria transmission in urban areas will likely be reduced by addressing socioeconomic and environmental factors that promote exposure to disease vectors. Enhanced regional surveillance systems in Nigeria can provide detailed data to further refine our understanding of these factors in relation to malaria transmission.