The aims of this study were to isolate and identify lactic acid bacteria from the fresh milk of crossbred Peranakan Etawah goats in Yogyakarta, Indonesia and assess their potential utility in dairy fermentation. Fresh milk samples were collected from three different farms and plated into de Man Rogosa and Sharpe (MRS) agar supplemented with 0.5% ox bile. Colonies were purified with a streaking method followed by morphological and biochemical analysis using Gram staining, a catalase test, tests of motility and spore formation and growth at different temperatures. Molecular identification was based on nucleotide sequencing of 16S rRNA genes. Four isolates, M101, M102, M103 and M104, were identified. Certain features of isolates M101 and M102 were homologous with Lactococcus garvieae, isolates M103 and M104 showed a degree of homology with Pediococcus pentosaceus and Lactobacillus paracasei subsp. paracasei respectively. Selected isolates were used to ferment milk at 37°C for 10 hours. After 10 h, milk fermented with Lactobacillus paracasei M104 had a pH of 4.21±0.07 and acidity of 1.13±0.05. Milk fermented with Pediococcus pentosaceus M103 had a pH of 4.34±0.03 with acidity of 1.18±0.05. Lactococcus garvieae had limited ability to acidify milk, producing only a slight change in pH over 10 h. There was no significant difference (P>0.05) in viscosity between milk fermented with Lactobacillus paracasei M104 and milk fermented with Pediococcus pentosaceus M103. Total viable cells were similar between milk fermented with Lactobacillus paracasei M104 and milk fermented with Pediococcus pentosaceus. On the basis of their capacity to acidify milk, Pediococcus pentosaceus M103 and Lactobacillus paracasei M104 were selected for further investigation.