An exploratory survey was conducted to understand sheep production systems and identify breeding practices, breeding objectives, and constraints as a first step towards developing breeding strategies for Bonga and Horro sheep breeds of smallholders in south-western and western Ethiopia. Data were generated through interviewing 229 (114 from Bonga and 115 from Horro) randomly selected sheep owners using a detailed structured questionnaire. Results indicate that sheep are kept for multiple objectives with source of income being rated highest. Breeding was generally uncontrolled. Size, color and tail type were the most frequently reported traits in selecting breeding rams across the two sites; whereas size, color, tail size and twining rate were mentioned as traits given due emphasis in choosing future Bonga breeding ewes. Farmers consider size, color, pedigree and age at first lambing in choosing Horro breeding females. Adaptive traits such as tolerance to diseases and feed shortage were given low emphasis in selecting replacement stocks in both of the districts. The survey identified several constraints such as early disposal of breeding stocks, small flock sizes with only a few breeding males, uncontrolled mating, communal grazing in wet season and free roaming during dry season that make controlled breeding or mating very difficult. Traditional breeding practices such as sharing of breeding rams should be further strengthened. Considering the small flock sizes in both the sites, reasonable genetic gain demands the formation of breeder’s group (co-operatives) schemes. This in turn requires the full participation and long-term commitment of sheep keepers and other livestock development actors. To realize full benefits of a breeding strategy; approaches should be holistic with concurrent improvement in the non-genetic factors (disease resistance and feed efficiency) as well.