This study was carried out in Wolmera Woreda of the West Shoa Zone of Oromia Regional State from October 2007 to April 2008. Simple random type of sampling was used to select 300 households from five peasant association for questionnaire survey and 37 smallholder farmers, who got at least 25% of their income from dairy and grouped in five groups each with 5 to 8 farmers, were included in the participatory method. Data were collected on socio-economic and farming system characteristics, livestock and cattle herd size and composition, dairy cattle management practices, different aspects of dairy cattle breeding practices and constraints associated with dairy cattle production. Data was analyzed using descriptive and differences between means was analyzed using one-way ANOVA. The results showed that the overall mean for family size was 5.7 person (SD=2.25). Cattle (37.3%) and sheep (27.8%) were dominated the livestock herd. The average cattle herd size in the study areas was 16.06. Shortage of grazing land was the most important constraint among the factors that hinder dairy development in the area (37.7%) followed by cattle disease (21.7%), shortage of concentrate feed (18.7%) and shortage of crossbred heifers (12.7%). This finding was also supported by the results of participatory methods. The average daily milk yield of diary cattle ranged from 0.91-2.50 liters in indigenous cattle and from 2.75-6.34 liters in crossbred cattle. The average lactation length was 5.82 months for indigenous cattle and 10.79 months for crossbreds. Breed effect on daily milk yield and lactation length was significant (p