The present study was conducted to estimate the exposure and characterize the risk for the child population of Serbia to Aflatoxin M1 (AFM1) from milk and milk-based food. A total of 3404 samples comprising milk and different milk-based food samples were collected from various regions of Serbia from 2017 to 2019. Evaluation of AFM1 exposure was carried out using the deterministic method, whereas risk characterization was evaluated using the margin of exposure (MOE) and the risk of hepatocellular carcinoma (HCC). Detection rates for AFM1 in milk and milk-based food samples ranged between 2% and 79%, with the highest incidence (79%) and mean level (22.34 ± 0.018 ng kg−1) of AFM1 being detected in pasteurized and UHT milk. According to the three consumption estimates, the values of estimated daily intake (EDI) were higher for toddlers as compared with children aged 3–9 years. Children aged 1–3 years had the highest risk of exposure to AFM1 in milk, with an estimated daily intake of 0.164 and 0.193 ng kg−1 bw day−1 using lower bound (LB) and upper bound (UB) exposure scenarios, respectively. Such difference could result from the higher consumption to weight in younger children. Based on the estimated daily intake (EDI) found in this study, the risk of AFM1 exposure due to consumption of milk and milk-based food was low since the MOE values obtained were >10,000. In addition, the risk of HCC cases/year/105 individuals of different age groups showed that the value of HCC, using potency estimates of 0.0017 (mean), was maximum (0.00034) in the age group 1–3 years, which indicates no health risk for the evaluated groups. The present study revealed the importance of controlling and preventing AFM1 contamination in milk through continuous monitoring and regular inspection to reduce the risk of AFM1 exposure, especially in children.