Institutions are critical to ensure the development of tourism industry. In this regard, therngovernment of Ethiopia has been exercising different institutional reforms. TTC institution is onernof intuitional reform which has been in placed to reinforce the development of tourism sector.rnHowever, the actual implementation of this reform did not bring improvements with tourismrnindustry at different levels. This study is therefor, intended to assess the establishment, structure,rnfunction, and challenges of Tourism Transformation Council (TTC) in Gullele sub-city in AddisrnAbaba. It has mainly focused on revealing gaps in the practice of implementation of thernmandates of TTC under the study. To conduct this research, mixed research method, whichrninvolved both qualitative and quantitative approaches, was employed. To collect the primaryrndata, interviews were undertaken with nine (9) experts of Woreda, Sub-city and Bureau levelrnCulture Art and Tourism Office and Ministry of Culture and Tourism and 198 questionnairesrnwere filled out and collected from the members of TTC institution. Reviews of legal instruments,rnstudies as well as documentation of realities about the TTC institution were used for secondaryrndata. The result of this study showed that basically TTC institution was established to enhancerninstitutional coordination and collaboration for tourism development. The other finding is poorrninstitutional resource with inactive members (actors) of TTC functions. The study also showed asrnthere is poor implementation of TTC functions with no significant improvement in tourismrndevelopment in the area. Moreover, the study found out that there is absence of clear operationalrnguideline, poor working linkage with destination, poor enforcement and accountabilityrnframework, budget constraints, lack of harmonious functions within the actors, frequent changernof leaders and members, low involvement of professional were major challenges of TTCrninstitutions. Finally, it is recommended that TTC as institution need to have sufficient resourcesrnand proper representation of private sectors and professionals with clear operationalrnprocedures of the actors. And should be also enhanced the capacity of members of TTCrninstitution with continuous training on integrated plan, proper implementation, accountabilityrnbacked by strong monitoring and follow up mechanisms