Desi ghee (DG) was prepared from fermented cream followed by heat clarification (desi method) in the laboratory and butter oil (BO) was prepared from fresh butter by melting and centrifugation. Fresh samples of three brands of industrial ghee (IG-1, IG-2, IG-3) were collected from the local market. Volatile compounds of desi and industrial ghee and butter oil were isolated and concentrated using direct injection and cryofocussing techniques; separation and identification was by Gas Chromatography Mass Spectrometry (GCMS). A maximum of 36 compounds were detected in desi ghee whereas compounds detected in three industrial ghee samples varied from 22–29. The lowest number of compounds (16) was detected in butter oil. Of the identified compounds, maltol, 5-hydroxymethyl furfuraldehyde, dihydrodihydroxypyranone, 1,3-butanediol and 1-octanol were identified only in desi ghee volatiles. The concentration of acetic acid was found to be remarkably higher in desi ghee volatiles than in industrial ghee. Also the levels of identified fatty acids, methyl ketones, aldehydes, lactones and alcohols were high in desi ghee volatiles compared with industrial ghee and butter oil. In total, 62 compounds were detected, which included 6 aldehydes, 12 ketones, 8 each of fatty acids, alcohols and lactones, 4 each of esters and hydrocarbons or other compounds, and 12 compounds remained unidentified.