The purpose of this study was to assess the practices and challenges of conducting action research in the primary schools of Burayu City Administration; to identify the opportunities that enables teachers and Educational leaders to conduct action research and to fill the gap that the challenge hinders them from conducting action research; To this effect, the researcher used both qualitative and quantitative method; when necessary mixed method was applicable in narrative and in numerical data for collecting and analyzing data. Sampled primary schools were selected randomly by using lottery method, respondent teachers from each school departments were selected by using stratified sampling, CPD committee members were selected by availability sampling, schools principals, CRC supervisors and Educational experts were selected purposively. Accordingly, 5 primary schools, 50 sample primary schools teachers, 5 sample primary school principals, 35 CPD committee members, 4 CRC supervisors and 2 Educational experts of respective primary schools were selected as samples. Questionnaire, interview and document analysis were the data collection tools, employed in this study. SPSS and table used to test and ensure the validity and reliability of the data and instruments. Data were analyzed and interpreted using both qualitative and quantitative analysis techniques. The researcher applied the individual group percentile, mean and mean difference and standard deviation as statically tools to analyze the data. From the analysis and interpretations of data, the major findings of this study was the current practices of conducting action research in primary schools found to be low; less financial and material support for the purpose of conducting action research; low motivation and interest of teachers and Educational leaders in conducting action research due to limited knowledge and skill, and the challenges that hinder them from conducting action research were lack of time due to work over load; no adequate library in the school and nearby school, no adequate research reference material and research paper conducted by teachers and other experts in the school, absence of people, who has experience on conducting action research to share their knowledge and skill, lack of people, who was committed to provide professional support and encourage teachers to be engaged in action research activities were the major problem investigated by the researcher. These problems should be minimized by strengthening stakeholdersâ€™ participation and giving awareness especially, who are working on Education sector development programs. Finally, the REB, ZEB, BCAEO and School Administration should be given emphasis on allocating finance and material; involving, initiating andmotivating teachers and Educational leaders in conducting action research to solve an immediate problem related to learning and teaching process and to be part of the solution by setting up different strategies. Fill skill gap of teachers and educational leaders by giving short train to be interested on conducting action research.