Milk in Ethiopia is mainly produced under three livetsock production systems, notably the pastoral, the mixed crop livestock and urban/peri-urban dairy systems. Although proximity to market favors urban dairy producers, there still exist various challenges among which are safety and quality issues. This study was initiated to assess the microbial qualities and safety of fermented milk–Irgo, which is one of the most prevalent forms of dairy products produced and marketed by urban dairy producers and intermediate traders in Hawassa city, southern Ethiopia. A total of 120 samples (raw milk=60 and Irgo=60) were collected from dairy shops in Hawassa city. Formal interviews on milk and Irgo handling practices were followed by microbial analysis of the products. The mean aerobic mesosphilic bacterial count (AMBC), coliform count (CC), Staphylococcus count (Staph. C) and lactic acid bacterial count (LABC) of the raw milk samples was 6.85, 6.14, 6.13 and 7.19 log cfu ml-1, respectively. Irgo samples had mean AMBC, CC, Staph.C and LABC values of 6.79, 5.6, 5.55 and 6.13 log cfu ml-1, respectively. Although, the counts of hazardous microbes were lower in Irgo samples than the raw milk, the overall microbial count in the sampled products is much higher than the minimum standards, which reveals the poor handling practices of dairy products in the city. This poor handling of dairy products have consequences to the public health, hence it require due attention in order to minimize its effect on the health and safety of consumers.