The Cyprus sheep and goat (S&G) sector is an important part of animal production. With the DoMEsTIc collaborative project between Greece, France, Cyprus and Morocco, we seek to dissect the actions needed to ensure the sector’s competitiveness and sustainability in the Mediterranean. Firstly, a common farmer survey was conducted in all countries. Secondly, information was collected on the institutional and market environment of the sector. In Cyprus, 158 farmers were interviewed on aspects of animal management, milk and meat production, product valorization, economics and market channels. Farm income is based on both milk and meat production, with higher milk value in recent years. Less than 2% of milk is used self-consumption, 84% of sheep and 76% of goat milk is sold, and 17% of sheep and 22% of goat milk is transformed by the farmers. The majority (70%) of sheep and goat farmers sell their milk to industry units, about 20% to small dairies, and 6-11% to breeder associations. S&G milk prices and demand from dairies are foreseen to be increased due to the pending PDO for halloumi cheese. More competitive milk prices could be achieved if the farmers formed well-functioning associations or established their own coop dairy facility to make and trade halloumi cheese. The institutional system governing the S&G sector consists of rules and regulations enforced by the Veterinary Services and the Department of Agriculture. Improved cooperation among breeders, along with knowledge transfer and institutional support, would lead to a sustainable S&G sector in the near future.