The aims of the present study were to identify risk factors associated with latent tuberculosis (TB), examine the development of active disease among contacts, and assess the effectiveness of treating latent infection in indigenous Brazilians from January 2006 to December 2011. This was a retrospective study consisting of 1,371 tuberculosis contacts, 392 of whom underwent treatment for latent infection. Morbidity-from-TB data were obtained from the Information System for Disease Notification (SINAN) database, and the contacts' data were collected from the clinical records using forms employed by Special Department of Indigenous Health (SESAI) multidisciplinary teams, according to SESAI's instructions. The variables that were associated with latent infection among the contacts were age (odds ratio [OR]: 1.03; 95% confidence interval [CI]: 1.02-1.04) and close contact with a smear-positive index case (OR: 2.26, 95% CI: 1.59-3.22). The variables associated with the development of active TB among the contacts were a tuberculin skin test (TST) ≥10 mm (relative risk [RR]: 1.12, 95% CI: 1.07-1.17), age (RR: 1.01, 95% CI: 1.00-1.03), and treatment of latent infection (RR: 0.03, 95% CI: 0.01-0.27). The estimated number of latent infection treatments needed to prevent one case of active TB among the contacts was 51 treatments (95% CI: 33-182). In contacts with TST ≥10 mm, 10 (95% CI: 6-19) latent infection treatments were necessary to prevent one case of active TB. Age and close contact with a smear-positive index case were associated with latent TB. Screening with TST is a high priority among individuals contacting smear-positive index cases. Age and TST are associated with the development of active TB among contacts, and treatment of latent infection is an effective measure to control TB in indigenous communities.