With the ineffectiveness of centralized forest management, the Participatory forestrnmanagement approach was introduced in to the forests eco-system of the Bale Eco-Regionrnin the late 1990s. In addition to this, REDD+ project was implemented in the Bale EcoRegion between 2012 and 2015 to ensure sustainable forest management. However, despiternthe efforts made by different actors, deforestation and forest degradation have beenrncontinued due to mainly poor forest policy formulation and implementation and lack ofrngood forest governance. Hence, the purpose of this study was to examine the challenges ofrnforest policy and governance in sustainable forest management in the Bale Eco-Region ofrnOromia Regional State. To this end, mixed research approach was adopted and thus, therndesired data was collected through key-informant interviews, focus group discussions andrnquestionnaires. Depending on this methods, the study found the following key things. First,rnthe federal forest policies are not easy for implementation because further regulations arernnot developed at the regional level, there is conflict of interest between the regional andrnfederal government over policy development , the time when to achieve the policyrnintentions are not specified and the inputs of all key stakeholders are not exhaustivelyrnincorporated. Second, there is lack of good forest governance, particularly lack ofrnaccountability, low efficiency, low fairness and ineffectiveness in the Bale Eco-region.rnFinally, while implementing the REDD+ project, forest governance of the Bale Eco-Regionrnhas faced different challenges, such as weak institutional arrangements, continuation ofrndeforestation, low enforcement capacity, low economic benefit of the community, lack ofrnstrong coordination with media and research institutes, conflict of interest among sectorsrnover forest land, and lack of adequate budget and logistics to undertake proper monitoringrnand evaluation. Hence, every concerned stakeholder should contribute their part to improvernthe formulation and implementation of forest policy, good forest governance, to financernthe REDD+ to improve the forests and community livelihoods, to improve the forest auditsrnand coordination of forest offices with media and research institutes