Traditional food processing methods such as salting, drying, and boiling are essential for enhancing food security, yet improper application of these techniques may pose safety risks. This study assessed food safety practices in the traditional processing of anchovy (Stolephorus spp.) among small-scale processors in Bagamoyo District, Tanzania. Data were collected through household surveys (n = 305), direct observation, and laboratory analysis of 120 samples obtained from fresh, salt-boiled, and sun-dried anchovies. Results indicated that 62% of processors lacked awareness of proper handling practices, 81% had not received formal food safety training, and only 60% were familiar with regulatory authorities. About 30% of respondents reported that delays before processing contributed to the deterioration of anchovy quality. Microbial analysis across the processing stages detected Escherichia coli in 20% (mean: 1.43 × 10 CFU/g) of fresh, 55% (mean: 1.73 × 105 CFU/g) of salt-boiled, and 20% (mean: 3.75 × 104 CFU/g) of sun-dried samples, while Staphylococcus aureus was present in 68% (mean: 8.35 × 103 CFU/g) of fresh and all salt-boiled and sun-dried samples (mean: 7.93 × 103 CFU/g and 2.48 × 103 CFU/g respectively); Salmonella spp. were not detected (<LOD). Although salt-boiling and sun-drying significantly reduced contamination (E. coli: p = 0.003 and 0.015; S. aureus: p < 0.05), overall microbial loads indicate that these methods are insufficient to meet the microbiological safety standards set by TBS (TZS 1807:2016) and Codex Alimentarius. Education level and years of experience significantly influenced awareness of safe handling. These findings underscore the importance of improved hygienic practices and strengthened regulatory monitoring to ensure the safety in traditional anchovy processing.