Management practices such as feeding, watering, housing and health management of dairy cattle were studied in Gurage Zone, Southern Nation Nationalities and peoples Regional State. In all studied areas, crop residues, natural grazing and hay were the three top livestock feed resources. Despite this, households make insignificant quantity of concentrate and face critical feed shortage during the dry season. Critical shortage of water was also noted during the dry season, particularly in Wolkite town. Shortage of animal feeds, land and water scarcity were the major constraints for dairy development in the study area. Supplementary feed and letting the animals to graze were the major utilization practices of feed resource. Three types of diseases namely FMD, Diarrhea and Anthrax were identified as the major health problem of cattle. Rapid urbanization coupled with increase in human population, standard way of life of the urban dwellers and conducive climate of the area can be considered as an opportunity for the development of dairy in the area. Therefore, market opportunity and linkages are the major issues for smallholder dairy development in addition to provision of the required services and resources, provision of credit, extension and training. However, there is a need for intervention to develop infrastructure, enhance input supply system, and undertake capacity development and training to enhance the skills of farmers in dairy production and marketing. Attention should also be given to effective veterinary services, improved feed production and conservation systems, feeding strategies and systems.