ABSTRACT The study was conducted in Lay Armachiho District of Central Gondar Zone of Amhara Region to characterize the milk production systems. A cross sectional survey research design and onfarm monitoring were employed in the study. Simple random sampling procedure was used to select representative households for the study. A total of 191 households were selected randomly based on the proportion of total households in each kebeles. Descriptive statistics like frequency and percentages was employed to describe the characteristics of milk production systems in Lay Armachiho District. The sources of feed for dairy cattle were from their own source or production (62%), followed by from the market (38%). Majority of the respondents (60.4%), have been faced with feed scarcity. Concerning breed types, some of the respondents (29.4%) have Holstein Friesian crossbreed type, majority of them own local breed type. Majority of respondents indicated that they prefer artificial breeding method (49.7%), some prefer natural mating method (27.8%). With respect to milk products utilization, overall, majority of the respondents (72.7%) indicated that the milk produced by the household was marketed, followed by consumed with in the household and given to calves. Only few proportions of households considered the selling of yoghurt. Butter was one of the marketable products sold by majority of households (74.3%). With respect to marketing constraints, the majority of respondents replied that they faced market problem during the fasting seasons and have faced the preservation problem and later the spoiling of dairy products. Among the problems in dairy animal production, disease occurrence (index=0.38), shortage of feeds (index=0.36), lack of market and long distance to market were identified as major constraints. Thus, feed resource improvement, veterinary service access improvement and enhancing market access should be taken into consideration to benefit the dairy farmers in the study area. Keywords: Characterization, dairy cattle, Lay Armachiho, milk production systems