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Smallholder dairy farming is increasingly becoming an important source of livelihoods for small scale dwellers in Lake Victoria agro-ecological Zone (LVZ) in Uganda. A study was carried out in Buikwe, Jinja and Mayuge Districts in LVZ of Uganda, with the objective of characterizing smallholder dairy farming. A total of 126 smallholder dairy farmers were interviewed using structured, semi-structured questionnaires and focus group discussions between September and November 2013. Data collected included; household demographics, challenges in smallholder dairy farming systems, available feed resources, labour distribution, milk production and marketing. The study revealed that households in Buikwe district had relatively larger herd size (4.29±0.864 head of cattle) compared to other districts. Natural pastures (p< 0.05, df= 4) were ranked as the main source of feed. Smallholder dairy farmers in Jinja ranked agro-industrial by-products as a major alternative feed resource supplemented to natural pastures while farmers in Buikwe and Mayuge utilized crop residues during periods of feed scarcity. Low farm gate price of milk that invariably fluctuated with season in all districts were the major (P< 0.05, df= 4) challenges faced by the smallholder dairy farmers. Feed scarcity (p= 0.001, df= 4) was ranked as the major challenge. The study, therefore, provided basic information on production characteristics of smallholder dairy farming system from farmer’s point of view that could benchmark strategic research interventions to address declining smallholder dairy farmers’ productivity.