We extend the numerical renormalization-group method to treat Bose-Fermi Kondo models (BFKMs) describing a local moment coupled both to a conduction band and to a dissipative bosonic bath representing, e.g., lattice or spin collective excitations of the environment. We apply the method to the Ising-symmetry BFKM with a structureless band and a bath spectral function $\ensuremath{\eta}(\ensuremath{\omega})\ensuremath{\propto}{\ensuremath{\omega}}^{s}$. The method is valid for all bath exponents
s and all temperatures
T. For
0<s<1, the range of interest in the context of heavy-fermion quantum criticality, an interacting critical point, characterized by hyperscaling of exponents and $\ensuremath{\omega}∕T$ scaling, describes a continuous quantum phase transition between Kondo-screened and localized phases. For Ohmic dissipation
s=1, where the model is relevant to certain dissipative mesoscopic qubit devices, the transition is found to be Kosterlitz-Thouless-like. In both regimes the impurity spectral function for the corresponding Anderson model shows clearly the collapse of the Kondo resonance at the transition. Connection is made to other recent results for the BFKM and the spin-boson model.