Like many cities in Sub-Saharan Africa, urban agriculture in Arusha city is perceived differently by urban land decision makers, agricultural and environmental officers as well as urban farmers. The way urban agriculture is perceived changes depending on urbanization rate and institutional framework of cities’ authorities. Despite that situation, information on how positive perception can lead to the prosperity of urban agriculture or its negative perception can hinder its prosperity is still implicit. Thus, this study was conducted to examine the perception held by urban farmers and officials in Arusha city and the way such perceptions affect urban agricultural activities. The study adopted a qualitative research approach in order to gain the in-depth respondents’ opinions and perceptual information about urban agriculture. The case study strategy was deployed by this study because the perceptional thoughts held by respondents on urban agriculture depend on the actual situation through which agricultural activities took place. A total of 60 respondents were exhaustively interviewed. Other information was obtained through observation as well as reviewing literature. All data obtained were analyzed and interpreted based on their content. The findings revealed that some of the negative effects caused by urban agricultural activities influenced the negative perception people held on it. Those effects were seldom managed by officials from Arusha city authorities. However, some of those effects to the environment and urban development were evident, they were sometimes exaggerated due to the negative perception already existing in the city officials’ minds. The positive perception of urban agriculture existed only when its associated benefits met the interests of the urban farmers and city officials. The study concludes that, the positive or negative perceptions of urban agriculture has close a relationship with the livelihoods of the farmers and the employment needs of officials such as urban planners, environmental officers and agricultural officers. Despite urban agriculture being somehow acknowledged in the policy documents, the effects of negative perceptions among different stakeholders about urban agriculture are considered less crucial in the policy implication and other formal governmental proclamation. However, in the reality it is critical.