This study was conducted in lalomama medir wereda, north shoa zone, Amhara NationalrnRegional State. The study was undertaken to investigate the role of local community basedrninstitutions in enhancing sustainable rural development with special emphasis on lalomamarnmedir wereda community based institution.rnThrough focus discussion, key informant interview, semi structured interview and surveyrnmethods, data were collected from the sample kebele representatives and government sectorrnoffices and analyzed.rnThe findings of this research reveal that Lalomama medir wereda community based in stitution isrna not-far-profit peasant's institution. It is exclusively peasants' membership organization that wasrnestablished to maintain the problems solved and to solve the unsolved problems with newrninitiatives thereby forming vanguard for the efforts to sustain. It was initiated by Agri-servicernEthiopia (ASE), and established in 2004 by the peasants who were program targets. It got legalrnpersonality from zonal justice office, an authorized government institution to register a not-forrnprofit organizations.rnThe study results indicate that the action groups that were arranged to carry out different projectrnactivities were organizational foundation of the Lalomama medir wereda community basedrninstitution. Evidences indicate that the action groups vanished with the formation of Kebelerninstitutions which later established wereda institution. The institution has three levels ofrngovernance structures. The highest governance level is the general assembly. This is the bodyrnthat decides on policy issues, elects the board of management and audit and controlrncommittees. The board of management is the second higher body. The lower level is led byrnexecutive committee members. The study reveals that places in the leadership position are heldrnby democratic election on the basis of one vote one man principle. However, women are notrnequally represented with men in the leadership positions of kebele executive committees.rnAbsence of rural craftsmen-potters, blacksmiths, carpenters etc., from the positions of leadershiprnat all levels seems also to constrain equal representation of the leadership.rnMany valuable things that are of impinging impact on the lives of the community are intended byrnthe institution in the area. Enhancing agricultural productivity thereby providing improved seeds,rndiversification of livelihood portfolio-vegetable, chicken, sheep and creating enablingrnenvironment for members to earn additional income are viable agricultural economic activitiesrnthat are undertaken. Empirical evidence shows that 5894 members of the institution were servedrnwith different agricultural inputs of which 494 quintals of wheat were provided to 2276rnhouseholds. 200 women were provided with pullets and cockerels. The women who werernprovided with chickens responded that they are able to cover their daily expenditure for pettyrnhousehold consumptions and in effect ewnomically empowered. They also indicated that it hasrnin addition raised their negotiation power as a result of which their role of decision on householdrnissues is recognized by their husbands. Moreover, maintenance of schools, taking care of bothrnhuman and livestock health, endeavors to curb the spread and effect of HI VIA IDS, creation ofrnemployment opportunity, offering of capacity enhancement training to members and otherrnstakeholders, and rehabilitation of natural resources seem vital contribution of the institution torndevelopment of the wereda.rnThe institution however, appears to face many challenges. Firstly, it appears to have a markedrnbudget shortage. Members' contribution is absolutely meager and seems unreliable. This mayrnpresuppose that the institution is not financially viable from the view point of members'rncontribution. Members' commitment appears also very low. The study indicates that the worksrnVIIIrnand viability of the institution is entirely dependent on the funds that are obtained from externalrn(donor) agencies. The dependency syndrome could partly be attributed to uninformedrnmembership composition and hinged limited capabilities that are critical factors to success. Therninstitution was also organized and legally certified in such a way that it cannot employ incomerngenerating activities. Ego-centric incentive motive towards which members implicitly or explicitlyrnincline to trawl daily income also seems to amplify their low commitment.rnMoreover, the Lalomama medir wereda community based institution is a fledgling institution-onlyrntwo years old, which supposedly puts its institutional vigor under pressure. Enormousity of therntasks, lack of knowledgeable development promoters at grass root level, externally expectedrnfund, low education level and lack of compatible managerial skills and varied commitment ofrnmembers appear to provide the institution challenges of maintaining services with undiminishedrnmomentum.rnNevertheless, the social, economic, environmental and political role it plays indicate that localrncommunity based institutions are important stimuli of development and their involvement is arnnecessary condition to bring about rapid development and ensure its sustainability. Despite itsrninfancy, the multifaceted attempts that Lalomama medir wereda community based institution isrnmaking to enhance development of the area appears to substantially contribute to food security,rnpoverty reduction, betterment of members and populace at large. Indeed it magnifies thernphenomenal role that local institutions can play in fomenting and forming base rock foundationrnfor sustain ability of development of the wereda.