The true value of goats, their management systems, and the limitations of smallholdings have not been fully explored in the context of sustainable livelihoods among rural smallholders in central Malawi. However, goats are an essential part of rural livelihoods as transferable assets and sources of household nutrition, especially at times of food insecurity aligned to an ever more variable climate. To study the impact and limitations of goat ownership in Malawi’s Lilongwe district, surveys were performed across four villages covering 148 households from October-November 2019. Surveys were designed to identify linkages between household demographics, livelihoods, goat ownership, and management practices. Findings revealed goats are highly valued compared to other livestock. However, herds were small (median = 3) with only 62% reported kidding in the last year, while 50% reported deaths due to diseases, predation (such as by hyenas), and dog bites. Odds-ratio analyses identified farmers (as a primary occupation) were more likely to successfully breed goats to increase their herd size. Larger herds were associated with those who could accumulate wealth and utilise goats for ceremonies. However, diseases were a major contributor to losses and increased the risk of household food insecurity. Limiting disease impacts through anthelmintics and supplementation were correlated to an increased likelihood of sustainable offtake from smallholdings and improved livelihoods. With limited access to veterinary services, smallholders utilise a diversity of medicinal plants and ash to treat diarrhoea in their herd. The results highlight that goat security and health is fundamental to realising smallholding livelihood gains. Future efforts should aim to empower smallholders through providing tools to monitor goat health and to assess the effects of local practices, including the use of medicinal plants, for goat health.