The main purpose of the study was to examine transformational leadership for organization rneffectiveness in private colleges in Addis Ababa city Administration. To achieve the objectives of rnthe study, descriptive survey method was used. From 252 instructors, 115 were selected by rnsimple random sampling. Similarly 7 college deans were selected by available sampling rntechnique. Totally 122 respondent were selected for the study. Nevertheless, only 90 instructors rnand 5 college deans totally 95 respondents participated for the final analysis of the study. The rncolleges selected in this study were: CPU College, Addis College, Addis Ababa Medical College, rnQueens College, Micro-link College, Summit College and Universal Medical College. rnQuestionnaire containing open and closed ended items and semi structured interview were the rnmain instruments used to collect data. Both quantitative and qualitative data were collected and rnanalysed. The data obtained through the questionnaires were analysed using frequency, rnpercentages, mean, standard deviation, rank order. The information acquired through open ended questionnaires and semi structure interview were analysed to complement the quantitativerndata. The majority of respondents stated that the perception of the college community about rntransformational leadership was found moderate. Leaders describing their vision of the future in rnthe college, values and appreciates individual work and maintaining balance in the face of rncatastrophe in the college were low. The study also illustrated that leaders overlooked followers rnpersonal development in the organization, poor organizational structure of the college, weak rncommitment of followers to participate in the leadership process, leadersâ€™ incapability of leading rnchange and forward looking, leaders poor perception and ability about transformational rnleadership, were the major challenges of transformational leadership in the colleges. The results rnof the study also indicated that creating awareness for the college community about rntransformational leadership, building team spirit amongst the different functional units of the rncollege, consider the moral and ethical aspect of followers, link performance with intrinsic rnmotivation in the organization, involving members of the organization in decision making, were rnthe major solutions for the challenges of transformational leadership effectiveness in the rncolleges. Creating awareness, ensuring mutual respect, team spirit and link performance with rnmotivation for instructors were the major recommendations made in the study.