The subject of this review is the dairy industry in the Republic of North Macedonia. This industry can bring many economic and social benefits to society and the economy. The paper provides a description and analysis of the current situation within the dairy industry in our country. Milk production rates in our country are analyzed, with a comparative approach to production rates at global and European levels. In the Republic of North Macedonia, milk production is characterized by many traditional small farmers (80% of the total) with 1-3 cows and low annual milk productivity (2-3 thousand liters per cow). The number of large specialized farms with more than 15 cows (about 3% of the total) with annual milk production of about 5 thousand liters per cow is minimal. Only 1% of all farms have more than 50 cows. The Republic of North Macedonia is an absolute importer of milk and its products. The quantity and monetary value of imported milk and its products are many times higher than the quantity and value of exported milk. Today, the dairy industry faces various challenges in the three main pillars of sustainability: economic, social and environmental including fluctuating market prices, high labor costs, and demographic characteristics of the population in terms of age. In conclusion, for the dairy industry to be sustainable, all activities should be carried out in partnership with the industry (along the value chain), policymakers and a wide range of stakeholders, including consumers.