The remarkable reduction in tsetse fly and its vector trypanosomosis in the South-West zone of Nigeria have led to the development of smallholder dairy production which is predominantly practised by the Fulani agropastoralists in the zone. This study was conducted by the administration of structured questionnaires to farmers in the Derived savannah area of Oyo State in the South-West zone of Nigeria with aim of assessing the performance of traditionally managed Bunaji (White Fulani) cattle in this newly encroached zone by the Fulani pastoralists from the northern parts of the country. The survey showed that milk offtake or partial milk yield (0.6 kg/day), pregnancy rate (53.2%), calving rate (49.5%), calf crop (37.11%) and body condition score (4.3) were low and typical of tropical breeds of cattle. Also, average age at first calving (47.8 months) and calving interval (18.1 months) were on the high side. Majority (80%) of the dams produced their young ones during the wet season while a few ones (20%) calved during the dry season. Diarrhoea (84%), helminthosis (72%) and sand eating (64%) were the major diseases of calves in wet and dry season, respectively; whereas in addition to diarrhoea and sand eating, low milk production (90%) was peculiar to adult cattle in dry season. Calves’ overall mortality was 24.11% with majority (73.77%) occurring during the first week of life; it was higher in wet season (86.89%) compared to the dry season (13.11%). Overall mortality for adult cattle was 5.83% with the mortality, in contrast to the calves’ mortality, being higher in dry season (69.39%) than in wet season (30.61%), and the females (91.84%) more susceptible than the males (8.16%). The results indicate that the performance of traditionally-managed cattle in smallholder dairy production systems in Oyo State, South-West, Nigeria is poor and below their genetic potentials due to poor managemen