A survey was conducted on 176 smallholder dairy farms in Butere/Mumias and Kakamega districts of Western Kenya to establish the dairy production practices and constraints in the industry. There was low milk production (16.6 kg of milk per capita), which was attributed to the low number of dairy animals. The average land size was 2.4 ha with only 30.3% being allocated to pasture or fodder crops. Farmers with large farms (>2 ha) set aside bigger pieces (1.2 vs 0.4 ha) for pasture/fodder crop cultivation (p < 0.001), owned more (5.25 vs 3.18) dairy animals (p < 0.01) and produced more (9.2 vs 7.5 kg/cow per day) milk (p < 0.05) compared to those on smaller farms of less than 2 ha. The average herd size was 4.2 animals, of which only 45.0% were in milk, producing 8.0 kg/animal per day. Every kilogram of dairy meal fed increased milk production by 0.68 kg (p < 0.001). Over 90% of milk produced was consumed locally. The public institutions provided 74% of total extension services to farmers. About 49.5% of total dairy animals were bought from other districts owing to scarcity.