This study was done to determine the role of warehouse receipt system (WRS) in improving cashewnuts marketing by smallholder farmers in Mkinga district. The specific objectives were to assess the operations of WRS in improving cashewnuts marketing, to determine share of consumer price received by smallholder farmer when selling cashewnuts through WRS or through informal marketing channel and to determine factors influencing smallholder marketing choices among WRS and informal market in the district. Both descriptive and quantitative methods of data analysis were used. The marketing margin analysis was employed to determine share of consumer price received by farmer along WRS and informal markets. The binary logistic regression was employed to determine factors influencing smallholder marketing choice. The descriptive results show that most of farmer trade cashewnuts in informal marketing channel (83%). The results of the marketing margins shows that cashew marketing through WRS yields high share of consumer price received by farmer (TSh 300/kg) over share accrued in informal markets (TSh 200/kg). Logistic regression results shows that; distance to WRS centres, transport costs, experience and access to extension services were highly significant at p≤0.05 while quantity sold, education level and access to training were significant at p≤0.1. Positive coefficient on experience, quantity sold, transport costs and access to training implies an increase in the likelihood of a farmer changing to WRS. So far, a negative coefficient on distance, education and access to extension indicated less likelihood of the farmer changing to WRS with improvement in these variables. This study calls for improvements in WRS availability, farmer’s training, market information and enabling policy framework to enforce laws to enhance regulated WRS.CBIC-EPINAV PROGRAMME