This paper uses household and key informant survey data from Ethiopia to: (1) understand the organizational structures that influence change in dairy production systems; (2) explore how local-level innovation system networks are functioning in the smallholder dairy production and (3) identify intervention points for strengthening innovation capacity. Results revealed that public sector actors are the major role players in the dairy production system despite their minor role in marketing linkages. We also found out that the private sector actors play peripheral roles in the network.