The present study was undertaken to assess the challenges and opportunities faced by the respondents involved in dairy production in Urban and Peri-Urban areas of Uttar Pradesh. Urban and peri-urban dairy production systems are the emerging forms of dairy production systems as it involves the production, processing and marketing of milk and milk products that are directly marketed to consumers in urban areas. It involves direct marketing of fresh milk directly to the consumers and thus it adds value for both farmers and urban neighbors in reducing the distance between producers and consumers. Thus, for a sustainable production it is necessary to know about the opportunities and challenges faced by dairy farmers in urban and peri-urban areas. The study was conducted in Urban and Peri-Urban area of selected Agra Division of Uttar Pradesh and primary data was collected from 120 respondents through pretested structured interview schedule and group discussion method. The list of opportunities and challenges were identified as remunerative prices of milk, high demand of milk during festival season are major opportunities and illiteracy of dairy farmers leads to lack of knowledge that prohibit adoption of modified skills, limited availability of credit for establishment of dairy farms, remunerative price of milk due to unorganized market are major challenges urban & peri-urban areas.