Understanding the utilisation patterns of milk assists in designing appropriate dairy development schemes in rural communities. The objective of the study was to determine milk utilisation patterns in different smallholder farming systems in the Eastern Cape Province of South Africa. Data were collected through the administration of recording sheets to 130 randomly selected households in Alice, Fort Beaufort and Queenstown districts. Amounts of milk produced per household ranged from 9 to 21 l per household per day. Milk consumption/household/day was similar among the three districts. Milk consumption in the early lactation doubled the amount consumed in late lactation (P < 0.05). Milk in the communal areas was largely utilised as fresh or sour milk. Fresh milk was mostly used in tea/coffee or to make porridge for children. Sour milk was consumed with thick boiled maize meal. Fort Beaufort (10.2 +/- 1.37 l/day) had the highest sour milk sales whilst Queenstown had the highest fresh milk sales (9.7 +/- 5.57 l/day). It was concluded that quantities of milk consumed or sold as fresh or sour were generally low and varied across smallholder farming systems.