Subject and purpose of work: Dairy production has key functions in food security and poverty reduction, however, dairy farmers do not always benefit from this production. The aim of the study was to analyze the dairy value chain in Ada’a Berga district, Ethiopia. Materials and methods: Primary and secondary research was employed. Using pretested structured questionnaires primary data was collected from 123 dairy producers, 48 actors and 30 dairy consumers. Value chain analysis, a practical method for assessing policymaking appropriateness, was applied for the analysis. Results: The study results revealed the lack of structured dairy value chain, poor performance and weak linkage among dairy value chain actors. Conclusions: There is a need to strengthen input suppliers, the dairy market and dairy cooperatives, as well as to improve the dairy herd, introduce contract farming and control unlicensed traders. Such initiatives will enhance dairy value chain development and sustainability within the district.