The study was conducted to assess the impact of smallholder dairy cattle farming on socio- economic status of households in selected villages in Isagehe Ward of Kahama District in Tanzania. Specifically, the study assessed the impact of smallholder dairy cattle farming on household income, household food security and household assets. Purposive sampling was employed to select 6 villages keeping dairy cattle, out of which 61 households keeping dairy cattle and 59 households not keeping dairy cattle were systematically randomly selected. A cross-section survey was conducted and a structured questionnaire was used to interview the 120 household heads. Data from the study were coded, entered in computer and statistically analysed using The Statistical Packages for Social Science (SPSS) version 12. The study showed that the average household sizes were 7.7 and 6.7 for households keeping and not keeping dairy cattle respectively. Level of education of household heads keeping and not keeping dairy cattle were respectively 60.7% and 69.5% for primary education and 16.4% and 5.1% for secondary education. Of all sampled households, 85% were headed by males and 15% were headed by females. Mean annual household income was Tshs 1 568 183 and Tshs 752 038 for households keeping and not keeping dairy cattle respectively. The study showed that households keeping dairy cattle consume more energy and protein source foods than households not keeping dairy cattle. The difference in energy food consumption was significantly different (p < 0.05). For household assets, there was a statistically significant difference (p < 0.05), with households keeping dairy cattle owning more assets than households not keeping dairy cattle. From this study, it is concluded that households keeping dairy cattle have more income and are food secure with more household assets than households not keeping dairy cattle. It is recommended to include dairy cattle farming project wheniii planning for strategies of improving household income, food security, assets and malnutrition problems in rural community in TanzaniaMinistry of Livestock Development and Fisheries