The main objective of the study is to assess the contribution of dairy farming on rural livelihood. In Nepalese context, dairy farming is one of the most appropriate and viable alternatives, which can provide food in terms of milk and meat, income earning and energy generation in terms of biogas at the household level. In this study following issues were clearly examined and analyzed; • Crop and dairy farming and their production in Nepal. • Milk yield of individual dairy cow. • Role of Cooperative dairying in dairy production at the household level. • Role of dairy animal as a source of energy • Livelihood strategies being practiced by the farmers in order to maintain their livelihood. I hope this study is helpful for students, researchers, teachers and all those who are doing research, especially on various socio-economic aspects.