This study was conducted with the objective of assessing the opportunities and challenges of backyard poultry production at three villages in Ezha district, Gurage Zone of southern Ethiopia using a semi-structured questionnaire, field visit and interview with 150 randomly selected respondents. The dominant chicken production system in the study area was an extensive system (74%) with scavenging and seasonal supplementary feeding (53%). Grains are the main feed used. Almost 65% of poultry share the same room with the main house with perch, the rest 20%, and 15%, respectively, use the different shelters. Most of the farmers (80%) use traditional medicine to treat their chicken. The average age of first laying was 5months, mean number of eggs per clutch was 12. The mean clutch size was 3.3 and the hatchability percentage was 72%. The result revealed that the main constraints of village poultry production in the study area, especially in village2 were predator (48%), disease (33.7%), feed shortage (19.3%), market (10%), and the primary opportunity was extension (34%) followed by credit, (24.6%), market (23.4%) and feed access (18%) and, respectively. It is concluded that constraints and opportunities of village chicken production were identified. Controlling predators, improving the management practices, and educating the framers are viable options to improve the livelihood of the households.