A cross-sectional study was conducted between May 2003 and January 2004 on 130 households and 655 (246 indigenous and 409 crossbred) cattle to determine the prevalence of bovine tuberculosis (bTB) and assess risk factors associated with prevalence in smallholder dairy and traditionally managed herds in the Tanga region of North-eastern Tanzania. Random sampling, single intradermal tuberculin (SIT), comparative intradermal tuberculin (SCIT) tests and a questionnaire were used to gather individual animal and herd level information. From 642 animal tested by SIT, 35 (5.4%) were positive reactors for tuberculosis. Out of those 35 bTB positive reactors, eight (1.25%) proved to be positive reactors for tuberculosis upon further testing by SCIT. Based on the SCIT test, individual animal prevalences of bTB in the smallholder dairy and traditionally managed cattle was 2% and 0%, respectively. The corresponding overall herd prevalence was 5.7% and 0%, respectively. In conclusion, bTB prevalence seems low; however, its potential risk to public health is of concern; underscoring the need for further research, active surveillance to better understand the epidemiology of the disease in different cattle production systems in Tanzania.