Contract farming is believed to potentially increase smallholder farmers’ participation in intensive agricultural output and profitable markets. However, the success of such initiatives depends on the smallholders’ willingness to participate. This systematic review identified the primary drivers of smallholder engagement in cattle contract farming and the associated challenges and opportunities. Papers were gathered from various search engines including Scopus, Agora, Wiley, ScienceDirect, Google Scholar, and AgEcon Search. A total of 1483 papers were retrieved. CADIMA, a systematic review tool, was used to screen and select relevant papers based on the selection criteria for the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA). Only 27 publications met the selection criteria and were included in this study. According to this review, gender, age, experience, access to training, marketing information, a guaranteed market, availability of milk collection centres, and animal ownership are key factors influencing smallholder participation in cattle contract farming. Furthermore, lack of experience, small herd size, high off-farm revenue, and long distances to milk collection locations all contribute to the failure of cattle contract farming. Cattle contract farming offers opportunities, such as higher revenue, improved herd size, resource provision, and guaranteed markets. Therefore, governments, policymakers, and contractors must consider these considerations when formulating policies and contracts.