The use of areas outside protected areas by large mammals has been rising in India. The sloth bear (Melursus ursinus), a vulnerable species, has 50% of its current range outside protected areas. The study was conducted to assess the habitat use and distribution of sloth bears in a peri-urban forest agriculture matric in southern Karnataka using occupancy modelling. The area was overlaid by 2 x 2 km and covered an area of 176.334 sq. km. The survey was conducted by walking 4, 1 km transects in each 2 x2 grid. Covariates of habitat use such as presence data for termites, forest fruit tree species, cultivated fruit tree species, and distance to the nearest source of water were collected and terrain ruggedness data was computed from satellite imagery. Occupancy modelling was done using a single-season correlated detection model on presence software. The model compensated for the repeated spatial replicates influenced by the adjacent replicates. Sloth bears had high occupancy (93%) and detection (86%) in the area. The probability of habitat occupancy increased with termites, forest fruit trees, and terrain ruggedness and decreased with the increase in distance from water and cultivated fruit trees. The analysis showed that the forest-agricultural matrix is used as a single unit by bears. The natural spaces of the study site are under only partial protection, as they come under territorial forest classification, the study identified that the ruggedness, fruit tree diversity, and insect availability require attention from detrimental activities like stone extraction, and degradation of forest, and cultivation areas which exist in the area.