This study aimed at investigating factors affecting sheep and goat production within the crop-livestock farming system in Sohag governorate in Upper Egypt. Three districts were selected at random among the eleven districts of the governorate, Jirjah, Sohag and Akhmim. Data on 420 farmers (35 farmers within each of four villages within each of three districts) were collected during 2004-2005. Two statistical models were applied. Model 1 included the effects of districts, village within districts, farmers within village within districts as categorical effects, and farm size, area cultivated each with wheat (Triticum sp.), berseem (Trifolium alexanrinum), faba bean (Vicia faba), maize (Zea mays), sorghum (Sorghum bicolor), millet (Pennisetum typhoides) and darawa (Zea mays) and family size as covariates on number per household of each of buffalos, local cattle, crossbred cattle, sheep, goats and animal units as continuous variables. Model 2 studied the effect of districts, village within districts, farmers within village within districts on number of animals at different ages, i.e. herd/flock structure. Forward stepwise regression analysis using the residual of dependent variables in Model 1( e's) and independent X's was run in order to reduce number of X's to only those contributing significantly to Y variables. Results showed that, family size and village within district had significant effect on number of sheep. Districts in Model 2 had significant effect on all age classes of sheep and goats except on males less than one year and more than two years and Ewe Equivalent in sheep and male more than two years in goats. The partial regression coefficients (Model 1) were non-significant except for number each of buffaloes on berseem area, crossbred cattle on darawa area and sheep and animal units on family size. As family size increased by one member animal unit increased by 0.108, most of these increases are coming from sheep, i.e. sheep are most responsive species to meet family needs. Prediction equation of stepwise analysis showed only buffaloes and AU showed a reasonably high R2 (>0.40).