Background: Sheep production is a major component of the livestock sector in Ethiopia. The country owing to the large population of 30.70 million estimated numbers of sheep in the country and out of which about 72.14% are females, and 27.86% are males with diverse genetic resources. The real value of indigenous breeds was often under-estimated mostly due to their poor appearance and relatively low productivity. Developing countries in most cases opt for exotic breeds to increase animal productivity through crossbreeding or breed substitution without properly investigating the production potential of the indigenous breeds. The main objective of the research was to identify sheep flock composition and structure, farmers' traits of interest and breeding objective of Wollo highland sheep, and their $F_1$ crossbreed progenies. Results: Smallholder farmers' flock synthesized from breeding ewes, breeding rams, pre-weaned ewe lambs, pre-weaned ram lambs, unproductive ewes, castrated and fattened rams, with the percentage coverage of 29.2, 13.3, 15.5, 16.5, 12.4, and 12.5%, respectively. The maximum number of flock size was 289.0 sheep per flock and higher in the third stratum. The off-take rate percentage of the three strata presented as 21.9% in 1st stratum, 12% in the 2nd stratum, and 16.4% in the 3rd stratum and higher off-take rate recorded in the first stratum. Sheep producer's traits of interest ranked by growth rate (first), body size (second) and marketing value was third rank. Communal breeding (random mating), village based controlled breeding, mixed type and private ram controlled breeding practice were comprised of 39.7, 61.7, 52 and 71.3%, respectively. The percentages of ewes per flock composition were presented as 36.5, 27.1 and 25.5%, respectively in the 3rd stratum, 2nd stratum and 3rd stratum in the order of their importance's. Conclusion: Genetic improvement practices at smallholder sheep producers situation was showing promising outcome with indigenous Washera $F_1$ crossbred lambs and which designated for weaning rate, body size, marketing age, age at first lambing, good temperament and large litter size in the order of their rank. The contemporary breeding practice tendency indicated that, reduced flock size to improve flock productivity via crossbreeding practices.