Dairy farming has emerged as most important alternative for diversification of agriculture in Odisha. The problems perceived by the livestock owners should be taken into consideration while formulation of strategies for enhancing milk production in the state. Keeping this in view, the present study was conducted in villages Sambalpur district of Odisha. Based on the data analysis the strengths, weaknesses, opportunity and Threats of the dairy sector development in Sambalpur were identified. The finding of the Study would be very helpful for all the concerned stakeholders who are working for the Dairy development in the state. The problems perceived by the livestock owners should be taken into consideration while formulation of strategies for enhancing milk production in the state. Weekly milk payment system and regular payment of bonus provided by the co-operatives, educated board members with diversified experience and knowledge in the dairy sector, dairy farming is a livelihood occupation of the majority of the rural population , regular and guaranteed supply of raw milk from the milk co-operative societies , suitability with respect to ecological conditions for dairy development are the weaknesses. Milk shed area is scattered with less membership and members producing miniscule quantities, low price for milk as compared to other private companies , low productivity of animals and high cost of milk production, lack of support services , milk collection centres are not well equipped, limited market coverage due to less procurement as compared to private players, lack of structured and clear benefit packages, low level of milk procurement and insufficient raw milk supply for milk processing plants. More producers willing to join the co-operatives societies, developing infrastructure like processing equipment, etc growing milk demand scope for convergence with allied departments and substantial scope for modernization were the opportunities. Decline of grazing lands due to urbanization , increasing cost of inputs, the high cost of credit for dairy farmers, farmers losing interest in dairy farming , lack of financial assistance for dairy enterprise, existence of competition from other private units, lack of appropriate government policy favouring the dairy sector were the threats. The major production constraints were high incidence of diseases, lesser availability of nutritious feed, high interest rate on loans, high cost of input, inadequate credit, delay in sanction of crop loan, uncertain weather and high labour charge. The marketing constraints were price fluctuation, illegal deduction, market is far from production point, high cost of transportation and malpractices in weighing.