This study was tried to answer the inquiry ‘‘What Determines Participation Decision, Degree and Deed of Value Addition to Milk by Dairy Enterprise? by setting the foremost objective of examining the determining factors influencing decision, degree, as well as deed of participation to VAM, so as to find approaches necessary to promote dairy enterprises to engage in diversified VAM in the study area. By employing Yamane formula, a sample of 219 dairy enterprises was selected from the target population in the study area. A multi-stage sampling procedure was used to select sample dairy enterprises for data collection. The dairy enterprises stratified as micro, small and medium enterprises and the whole 219 dairy enterprises were selected using stratified random sampling technique from the purposively selected district; Addis Ababa, Debire Zeit, Sebeta and Sululta, and by the probability proportional to size; of which 212(96.8%) properly responded the survey questionnaire. Semi-structured questionnaires were used to collect data from the sampled enterprises. The descriptive statistics as well as Double-Hurdle and Hackman two-step models were used to analyze the determining factors affecting the decision, degree and deed of participation to VAM and the findings demonstrate that various factors affect these three outcome variables. The results after the double-hurdle model revealed that from the variables of interest machinery & equipment, the volume of milk in litter, access to credit services and skill training had positive and significant influence on the decision as well as degree of participation to VAM. While research & development and access to market information had a positive and significant influence on the degree of participation to VAM. On the contrary to prior expectation number of dairy cattle had negative and marginally significant influence on the decision of participation to VAM. Moreover, the results after Heckman’s two-steps model disclosed that from the variables of interest, volume of milk in litter had positive and significant influence on both the decision and deed of participation to VAM. Additionally, access to machinery and equipment and incentive had positive and significant effect on deed of participation to VAM. Therefore, this study suggests that establishing dairy training centers, increases volume of milk, shorten way of credit services provision, encouraging innovation of micro, small and medium scale low cost processing machinery and equipment and providing market information about local and foreign market are required to promote the well enough and diversified milk value addition by dairy enterprises.