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The number of small holder dairy farms in the peri-urban areas of Kampala are increasing. This could be due to the high demand for dairy products by the increasing urban population and the need to provide an alternative source of income especially for the resource poor urban population. The farmers rear both improved breeds and local breeds. However, no detailed study has been carried out to address the factors that affect peri-urban dairy production. A survey was carried out in the peri-urban areas of Kampala to find out how these factors affect production. Specifically the study aimed at investigating how socio-economic factors affect dairy production. The econometric model (Cobb-Douglas production function) and descriptive statistics were used. The results showed that the breed of the cows, experience in dairy farming, purchased feeds and labour were the biggest vAriables affecting dairy farming in the peri-urban areas of Kampala city.lt was therefore recommended that if milk production in the peri-urban areas of Kampala is to be increased, farmers should be encouraged to rear improved breeds.