<p>Climate change certainly has widespread and varied effects on ecosystems, agriculture, human health, and economies. Climate change is posing significant challenges and impacts on smallholder farmers’ farming systems including dairy production in Ethiopia. This study was conducted to analyze the adoption of climate-smart dairy production practices and the challenges associated with their implementation in Southwest Ethiopia. A cross-sectional study design and a mixed research approach were employed. Data were collected from 266 randomly selected households using a pretested structured questionnaire. The data were analyzed using a multivariate probit model and thematic framework analysis. The results indicate that about 56% of households adopted artificial insemination, followed by 36.8% adopting manure management, and 32.3% improving fodder practices. The adoption of climate smart dairy production practices was positively influenced by the age and education level of household heads, livestock size, family size, participation in training, frequency of extension contacts, use of credit, access to climate information, and access to dairy inputs. Conversely, it was negatively affected by the dairy farming experience of households. The study also underscores several challenges such as resource constraints, marketing and value chains weakness and limitation of scaling<i>-</i>up <i>and</i> dissemination of various climate smart dairy practices implementation in the study area. This finding suggest that development agents and other stakeholders should prioritize intervention in capacity building, technology transfer, and market development to overcome barriers and promote the widespread adoption of climate smart agriculture among dairy farmers.</p>