The Ethiopian TV ~ T system, in line with many modern TVET systems worldwide isrnorganized as an outcome-based system. To this end identified competences needed in thernlabor mark t will become the final benchmark of training and learning, and that allrnin titutions rules and regulations of the TV T system defined so that they support trainees tornbecome competent. However the intended goal could not be attained without the fulfillmentrnof required resources (human and physical). Therefore, it has become indispensable tornconduct a research under the title 'Practices and Challenges of Outcome-based Training inrnlected Technical and Vocational Education and Training Institutions: the Case ofrnInstitutions in Arsi Zone'. Athlet Kenenisa Bekele TVET College and Asella TVET Instituternwere selected for the study based on stratified sampling technique. The subjects of the studyrnwere two Deans/Directors, two training process owners, 44 trainers and 178 trainees, andrnthey were s lected based on purposive quota and random sampling techniques asrnappropriate. The purpose of this study was to assess the implementation of OBT in publicrnTVET in titutions. For the execution of this study, descriptive survey method was employed.rnIn this endeavor data were collected through questionnaires, interview, observation, andrndocument analysis. Questionnaires were distributed to simple randomly selected traineesrnfrom each considered departments and trainers. Interviews were conducted with deansrndirectors and training process owners. For data analysis statistical tools such as percentagernmean value and chi-square were used. The study revealed that the competence and fitness ofrnthe trainers were low; the adequacies of workshop /Iaboratory including training materialsrnand equipment for OBT were inadequate. Accordingly, there was no adequate training up tornthe predefined performances stated in EOS. Moreover, there was lack of on-job training onrndifficult unit of competences within Occupational Standard. Real work place/situation, thernmajor important unit of OBT to provide practical training was missing. Finally, in light of thernmajor findings of this study and conclusions made, recommendations are forwarded in orderrnto improve OBT