Accurate estimates of Mycobacterium tuberculosis infection in young children provide a critical indicator of ongoing community transmission of M. tuberculosis. Cross-reactions due to infection with environmental mycobacteria and/or bacille Calmette-Guérin (BCG) vaccination compromise the estimates derived from population-level tuberculin skin-test surveys using traditional cutoff methods. Newer statistical approaches are prone to failure of model convergence, especially in settings where the prevalence of M. tuberculosis infection is low and environmental sensitization is high. We conducted a tuberculin skin-test survey in 5,119 preschool children in the general population and among household contacts of tuberculosis cases in 2012-2014 in a district in northern Malawi where sensitization to environmental mycobacteria is common and almost all children are BCG-vaccinated. We compared different proposed methods of estimating M. tuberculosis prevalence, including a method described by Rust and Thomas more than 40 years ago. With the different methods, estimated prevalence in the general population was 0.7%-11.5% at ages <2 years and 0.8%-3.3% at ages 2-4 years. The Rust and Thomas method was the only method to give a lower estimate in the younger age group (0.7% vs 0.8%), suggesting that it was the only method that adjusted appropriately for the marked effect of BCG-attributable induration in the very young.