This study was carried out to evaluate the performance of dairy cattle managed under different production systems of smallholder dairy cattle keepers in Kilolo district. The breeds involved in the study were Friesian and Ayrshire crossbred cows. Also a survey was conducted on the production environments of Kilolo herds of crossbred dairy cattle. Primary data were collected using a structured questionnaire in which a total of 176 farmers in Kilolo district were interviewed. Statistical Package for Social Science (SPSS) was used to analyse the primary data and the biological data were analysed by using General Linear Model (GLM) procedure of Statistical Analysis System (SAS) computer software. The main constraints of dairy farming in the district were livestock diseases (63.6%), lack of dip tanks (51.7%) and feeding costs (44.3%). The average age at first calving (AFC) was 1004.4 ± 13.15 days. Friesian crosses were significantly older at first calving by 21 days compared to Ayrshire crosses. The overall mean calving interval (CI) was 482.2 ± 2.41 days. Year of calving and breed of cows significantly (P < 0.001) influenced CI. The mean total lactation yield (TLY), lactation length (LL) and dry period (DP) were 1612.9 ± 13.26 kg, 359.9 ± 3.61 days and 129.5 ± 5.13 days respectively. The season of calving had a significant effect on AFC, TLY, and DP. Breed had a significant effect on AFC, CI, TLY and LL. The total lactation yield and lactation lengths had a linear increase from parity one to three. The genotype with 50% taurus inheritance in all breed groups had lowest total lactation yield compared to those with 62.5 and 75% exotic inheritance. Crossbred cows with 62.5% taurus blood appeared to be the best milk producers and could therefore be recommended as the genetic group of choice for Kilolo production system.