Human activities and biological invasions have caused unprecedented biodiversity loss over the past 500 years. Proximity to humans drives the spatial distribution of species toward less disturbed habitats. Invasive species can competitively exclude native species, but species may coexist due to different habitat preferences. Here, we investigated how proximity to farms and the presence of the non-native European hare (Lepus europaeus) influence the habitat use by the Brazilian cottontail (Sylvilagus minensis) in southeastern Brazil. We found that the probability of cottontail site use increased with native forest cover and decreased with farmhouse proximity, ranging from 0.05 (SE = 0.02) at sites close to farmhouses (≅ 900 m) with no native forest to 0.70 (SE = 0.15) at sites far from farmhouses (≅ 2500 m) dominated by native forest. Higher risk of harassment and predation by free-roaming dogs and cats may explain the negative effect of farmhouse proximity on cottontail habitat use. We found little evidence for competitive exclusion by the European hare. Instead, our results suggest that the two species spatially segregate due to different habitat preferences. While the European hare more likely uses farmland in its native and non-native range, our results suggest that the Brazilian cottontail is a forest dweller. Although we found only weak evidence of competitive exclusion, we advise caution because invasive species may delay the onset of detrimental effects due to initial low population densities in newly invaded areas as is the case of the European hare in southeastern Brazil.