Homemade yoghurt is the most popular type of fermented milk in Ethiopia. It provides nutrients to all ages of the human race. Similarly it is a good growth medium for spoilage and pathogenic microorganisms. Food borne illness associated with homemade yoghurt is attributed primarily to contamination by food handlers followed by poor sanitation of utensils and environment during manufacture and storage. The objective of this study was to evaluate the bacteriological quality and safety of homemade yoghurt and to assess hygiene and handling practice of vendors in restaurants and cafeterias of Bahir Dar town. A cross- sectional study was done from May to June, 2014. A total of 30 homemade samples were purposively collected from restaurants and cafeterias in Bahir Dar town for bacteriological analysis according to the standard procedures such as aerobic measophilic count, total coliform count, fecal coliform count and isolation of Salmonella. The hygienic and handling practices of vendors were assessed using observation checklist and interviews. For the aerobic mesophilic count all of the samples had unsatisfactory microbial level with a mean of 7.44 log cfu/ml. The total coliform and fecal coliform of all of the samples were in the acceptable and unsatisfactory microbial level with a mean of 3.45 log cfu/ml and 3.13 cfu/ml, respectively. In addition, Salmonella detected in 9 (30%) homemade yoghurt samples were unacceptable for consumption. Therefore the established level of unsatisfactory, acceptable and unacceptable microbial level with poor sanitary conditions and poor food hygiene practices of handlers required periodic sanitary-hygienic evaluation and inspection of catering establishments and educational programs targeted at improving the attitude of food handler should be strengthened to reduce public health hazards. Keywords and phrases: Bacteriological analysis, food handlers, homemade yoghurt, hygiene, practices.