The use of veterinary antibiotics is largely unregulated in low-income countries. Consequently, food producers rarely observe drug withdrawal periods, contributing to drug residues in food products. Drug residues in milk can cause immunogenic reactions in people, and selectively favor antibiotic-resistant bacteria in unpasteurized products. We quantified the prevalence of antibiotic residues in pasteurized and unpasteurized milk, and antibiotic-resistant bacteria from unpasteurized milk sold within Kibera, an informal settlement in Nairobi, Kenya. Ninety-five milk samples (74 pasteurized and 21 unpasteurized) were collected from shops, street vendors or vending machines, and tested for the presence of β-lactam and tetracycline residues using IDEXX SNAP kits. MacConkey agar without- and with antibiotics (ampicillin, 32 μg/ml; tetracycline, 16 μg/ml) was used to enumerate presumptive E. coli based on colony morphology (colony forming units per ml, CFU/ml). β-lactam and tetracycline residues were found in 7.4% and 3.2% of all milk samples, respectively. Residues were more likely to be present in unpasteurized milk samples (5/21, 23.8%) compared to pasteurized samples (5/75, 6.8%); P = 0.039. Two thirds of unpasteurized samples (14/21, 66.7%) contained detectable numbers of presumptive E. coli (mean 3.5 Log10 CFU/ml) and of these, 92.8% (13/14) were positive for ampicillin- (mean 3.2 Log10 CFU/ml) and 50% (7/14) for tetracycline-resistant E. coli (mean 3.1 Log10 CFU/ml). We found no relationship between the presence of antibiotic residues and the presence of antibiotic-resistant E. coli in unpasteurized milk sold within Kibera (P > 0.2).