The aim of this study was to identify yeasts from traditional Tanzanian fermented milk, “mtindi” and industrial fermented milk, “yoghurt” and to determine their in vitro proteolytic activities. A total of twenty five yeast isolates were studied. Identification was done by ribosomal DNA - Polymerase Chain Reaction (PCR) amplification and sequencing of the domains D1/D2 of the 26S rRNA gene. The identified yeasts were Candida tropicalis, C. pararugosa, Clavispora lusitaniae, Issatchenkia orientalis/Pichia kudriavzevii, Pichia guilliermondii/Meyerozyma guilliermondii, Galactomyces geotricum, Debaryomyces sp and Yarrowia lipolytica. However, Y. lipolytica and D. hansenii were detected from yoghurt samples only, while G. geotrichum was found in both mtindi and yoghurt samples. Candida sp. and Pichia sp. were detected in mtindi samples only. The highest yeast load was of C. paragurosa (over log 6 CFU/ml) and P. guilliermondii was the least isolated strain in numbers of slightly over log 2CFU/ml (p<0001). Proteolytic activity was analysed by plate assay using nutrient agar media supplemented with milk casein. Over 80% of the isolates were protease positive. The highest activity was detected on C. pararugosa isolated from mtindi with the diameter of clear zone 36.667+5.4mm, (p<0.01). Our results showed the potential of dairy yeasts as a source for further exploitation of the production of proteolytic substances with either potential health benefits or spoilage abilities.