The study was conducted to assess the hygienic handling and processing, microbial, compositional and acceptability of butter in Hawassa.The sanitary practice were found to be sub-standard. About 63.3 % of the women were involved in milk processing and products. Butter making materials used in the area include clay pot, spices and herbs such as Ruta chalepensis, Nigella sativa, Aframomum angusti-folium, and Allium ursinum were commonly used by the farmers to improve aroma and increase shelf life of butter. The average gross compositions of butter from market were: Fat: 82.3, Ash: 0.14, TS: 84.95; and moisture 15.05. The percent moisture content and total solid of butter from the dairy product shop was significantly higher (p>0.01) than open market. Butter sampled from shops and open markets had mean yeast and mould count and lactic acid bacterial count of 5.08 and 7.18 log cfu/g, respectively. The mean aerobic mesophilic bacterial count from the producers was 5.6 log cfu/ml. The aerobic mesophilic bacterial count of butter obtained from village was significantly greater (p>0.05) than that of Hawassa city.