Various efforts had been made to promote dairy development as a major instrument for rural develop-ment in Indonesia. In general, the objectives of the policies and programs are to increase milk production, improve nutritional standards, and improve the economy of small farmers.Dairy cooperatives have an important role on dairy development in Indonesia, such as milk collectionand improving milk marketing facilities, adopting measures; credit, feed supply, veterinary aid, artificialinsemination and cows insurance to promote milk production, undertaking more farmers orientedresearch and studies on the socio economic aspects of dairy business, expanding dairy education andextension services, and enhancing government role in integrated dairy development. The role of dairycooperative services on dairy development is discussed in this paper with the case study of DaerahIstimewa Yogyakarta Province.