This study sought to examine the impact of dairy enterprises on employment creation and income generation in Hadiya zone, Ethiopia. Data were collected from 385 randomly selected household heads, three FGDs participants and five key informants’ interviews. Data were analyzed using descriptive statistics and propensity score matching. The survey results showed that out of 385 sampled household heads 126 (32.5%) were members and the remaining 259 (67.5%) were non-members of micro and small dairy enterprises. The propensity score matching result shows that being member had significant positive impact on members’ employment creation and income generation. The result revealed that the membership resulted in average increment of household’s annually employment creation by about 4 persons (33.98%) and income generation by Birr 12,339.00 (32.57%). The result showed that membership in dairy enterprises had a significant and positive impact on employment creation and income generation. The impact estimates were found to be insensitive to unobserved selection bias. It is, therefore, essential to expand and strengthen development of dairy enterprises and the membership of households in dairy enterprises to increase employment creation and income generation of members.