Studies of contagious yawning have reported inconsistent findings regarding whether dogs exhibit this behavior and whether it is mediated by social-cognitive processes or the result of physiological arousal. We investigated why some dogs yawn in response to human yawns; particularly, whether these dogs are exceptional in their ability to understand human social cues or whether they were more physiologically aroused. Sixty shelter dogs were exposed to yawning and nonyawning control stimuli demonstrated by an unfamiliar human. We took salivary cortisol samples before and after testing to determine the role of arousal in yawn contagion. Dogs were tested on the object-choice task to assess their sensitivity for interpreting human social cues. We found that 12 dogs yawned only in response to human yawns (i.e., appeared to exhibit yawn contagion), though contagious yawning at the population level was not observed. Dogs that exhibited yawn contagion did not perform better on the object-choice task than other dogs, but their cortisol levels remained elevated after exposure to human yawning, whereas other dogs had reduced cortisol levels following yawning stimuli relative to their baseline levels. We interpret these findings as showing that human yawning, when presented in a stressful context, can further influence arousal in dogs, which then causes some to yawn. Although the precise social-cognitive mechanisms that underlie contagious yawning in dogs are still unclear, yawning between humans and dogs may involve some communicative function that is modulated by context and arousal.