Both Zika, which is of particular risk to pregnant women, and the dengue virus are spread by the Aedes aegypti mosquito, which is common in tropical Malaysia, Southeast Asia's third largest economy, and across the region.
Neighboring Singapore has reported more than 200 cases of Zika.
Three days ago, Malaysia reported its first Zika infection - a woman living near Kuala Lumpur who contracted the virus during a visit to Singapore.
On Saturday, Malaysian authorities said they had detected the first local infection: a 61-year-old man in the city of Kota Kinabalu, in the Malaysian part of Borneo island.
"The confirmation of the second case of Zika in Kota Kinabalu suggests that the virus is already present within our communities," Health Minister Subramaniam Sathasivam said.
"Zika is present in our country. New cases will continue to emerge," he posted on his Facebook page.
Zika infections in pregnant women have been shown to cause microcephaly - a severe birth defect in which the head and brain are undersized - as well as other brain abnormalities.
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The connection between Zika and microcephaly first came to light last fall in Brazil, which has since confirmed more than 1,800 cases of microcephaly.
In adults, Zika infections have also been linked to a rare neurological syndrome known as Guillain-Barre, as well as other neurological disorders.