This study is uniquely structured to assess the potential for future development of the Rwandan goat industry based on a thorough empirical analysis of how farm households of many different types participate in, and depend on, this pervasive industry. Data from the 1984 National Agricultural Survey in Rwanda and the 1989 follow-on survey permit us to highlight recent trends in goat (and other livestock) production in Rwanda, and to assess the degree to which variations in goat production are linked to other household and farm characteristics. Findings show that farmers are adapting to population pressure by shifting away from the production of cattle in favor of small ruminant production. Declining farm size, low start-up costs and relatively low mortality rates have all contributed to the growth of goat production, particularly among young farmers and those with small holdings. The major factors influencing livestock production in Rwanda are farm size and the availability of household labor. Rwandan farmers are currently overstocked with livestock, marketing only one-third of the goats potentially available for sale each year. This is partly because meat consumption in Rwanda is very low due to its high cost relative to other sources of protein, but also because farmers use livestock as a mechanism for savings and the accumulation of wealth, to be "cashed in" only for special occasions or in times of need. Possibilities for local processing of hides and skins and for manufacturing leather products are reviewed.