This research was aimed to know the mechanism of UMKM development based on zakat, infak, and alms productive funds (ZIS) in Rumah Zakat Yogyakarta through the program of Senyum Mandiri and the effects of UMKM development done by Rumah Zakat Yogyakarta through the program of Senyum Mandiri toward the increased revenue. This research is a field research carrying out qualitative approach. The data were obtained by conducting observation, interviews, and documentations. Then the obtained data were interpreted in accordance to the phenomena and problems found in the field during the implementation of the research. The subjects of the research were Lembaga Amil Zakat (LAZ), Rumah Zakat Yogyakarta including branch leaders and independent staff of Daya Insani functioned as facilitator in the target area in Tamanan village Banguntapan district, Bantul. In addition, the beneficiaries of micro small and medium enterprises or members of Senyum Mandiri Program in Tamanan village, Banguntapan district, Bantul also became the subjects of the research. The findings of the research show that the mechanism of UMKM development done by Rumah Zakat Yogyakarta through Senyum Mandiri Program is as follow: 1) selection of eligible communities, 2) business feasibility analysis, 3) mentoring, training and business monitoring,4) evaluation. The use of zakat, infak, and alms productive funds done by Rumah Zakat Yogyakarta to develop UMKM through Senyum Mandiri program gave impact toward the increased revenue of UMKM in the aspects of 1) business profit, net income per day of the active member and independent member from Senyum mandiri program, 2) business turnover, an increase in gross revenue per month of the active members or independent members from Senyum Mandiri program, 3) business assets, an increase of business assets ownership owned by active members and independent members from Senyum Mandiri program.