This research analysis school principal’s leadership practices and challenges in Yeka Sub-city: rnDej.Wondirad, Kara’alo, and Millennium Secondary Schools. Literatures on practices and rnchallenges of school leaders were scrutinized and employed under the study based on research rnobjectives. The research was carried out using quantitative and qualitative research approach rnwith descriptive research design. After selecting the schools using stratified sampling, simple rnrandom sampling technique was used to select teachers for questionnaire. The school principals rnand supervisor were purposely selected for the interview. Among 287 questionnaires that were rndistributed, 255 were returned which shows 93.4% response rate. The result of Cronbach’srnalpha that used to measure internal consistency (reliability) showed that r: 0.964 which rnwitnesses high internal consistency. The data were analyzed using SPSS version 24. The results rnof the study presented in tables, figures, percentages, mean and standard deviation. The overall rnfinding of the study depicted that planning, goal clarification, organization, management,rndecision making and well-coming and bringing changes are among the practices of school rnleaders. Among these the finding showed better practices of school leaders in goal clarification rnareas. The school principals have limitations in implementing and allocating the school budget rnand resources effectively. School principals have fear of decision making. The school principalsrnfaced lack of effective communication and shortage of employees and resources in the school. rnFurthermore, the research found low interest of students for education, lack of vision or sense of rnpurpose for learning and high disciplinary problems. In addition, the school surrounding rnenvironment was challenges of school principals. Also, low participation of parents and limited rncommitment of SPTAs in the schools activities were found. Thus, the research concluded thatrnmanaging all the school activities: the overall teaching learning processes are practices of rnschool principals. Lack of proper support from concerned officials, the new educational policy, rnfinancial and resources problems, communication gap, lack of motivation and teachers’ rncommitment were indicated as challenges. Based on the major findings and conclusions, the rnstudy recommended that the concerned government authorities should give on job training for rnteachers, school principals and supervisors. The school principals should create effective rninternal and external communication. Concerned authorities should co-operate to solve the rnschool problems