The study examined the effect of catfish production on smallholder farmers’ welfare in Osun State, Nigeria using the Odo-Otin Local Government Area of Osun State as a case study. A purposive sampling technique was used in selecting 109 farmers and a structured questionnaire was used to collect data. Descriptive statistics, gross margin analysis and a multiple regression model were used to analyse data. Results show that the majority (67.9%) of the catfish farmers were male, married (64.2%), with s mean age of 44 years (±13.1), and more than three-quarters (78.9%) had tertiary education. The majority of the catfish farmers (85.3%) raised fish to table size (grow-out) and 55.0% used static renewal technology. The average gross margin of ₦172,246 ($545) per production season (5–6 months) and BCR of 1.66 indicate that catfish farming is profitable and feasible. Regression results indicate that cost of feed and quantity of catfish harvested significantly increase the quantity of catfish sold, and quantities of catfish harvested and sold significantly increase food expenditure by farmers. Therefore, farm inputs (especially feed) should be subsidised by governments to encourage effective use of inputs to increase catfish production and subsequently, the welfare of farmers. Also, effort should be intensified at building the capacity of the farmers through education so as to enhance the adoption of technology which would invariably translate to better yields and income.