Dermatophytosis is a common skin disease in cats and dogs caused by Microsporum and Trichophyton fungi. Species identification and knowledge of their antifungal susceptibility are therapeutically and epidemiologically important. This study assessed the prevalence of feline and canine dermatophytosis in Iran, identified the aetiological agents molecularly and tested their antifungal susceptibility. A total of 308 companion animals (134 dogs and 174 cats) with skin lesions were examined from March 2015 to March 2018. Hair and skin samples were examined by microscopy with 20% KOH and cultured on Sabouraud dextrose agar with cycloheximide and chloramphenicol. Fungal isolates were confirmed by sequencing of the internal transcribed spacer (ITS) r-DNA region. The antifungal susceptibility of dermatophytes was tested by broth microdilution assay using standard drugs. Dermatophytes were found in 130 (42.2%) samples, 62 of them feline and 68 canine. Based on sequencing of all strains, M. canis (78.5%, P<0.05), M. gypseum (10.7%), and T. mentagrophytes (10.7%) were the dermatophytes isolated. The non-dermatophyte species Nannizziopsis vriesii was also isolated from two feline dermatomycosis cases. Dogs and cats younger than one year (61.5%) showed a statistically significantly higher prevalence of infection (P<0.05). Caspofungin produced the lowest geometric mean MIC at 0.0018 μg/mL, followed by ketoconazole, terbinafine, itraconazole, miconazole, griseofulvin, clotrimazole and fluconazole, in a 0.038–1.53 μg/mL range. This is the first molecular study to identify the causes of pet dermatophytosis in north-western Iran. ITS-PCR was shown to be a useful and reliable method for the identification of closely related species of dermatophytes in clinical and epidemiological settings. The lowest MIC of caspofungin indicated that this drug was the most potent in vitro.