The study was conducted in Debremarkos Town and its hinterland. In Ethiopia Town factoriesrnand infrastructure are too small and there are a few labor market linkage institution as a resultrnof this employment linkage between rural to urban has weakened.The general objective of thernstudy was to investigate the nature of rural-urban linkage and labor market in DebremarkosrnTown and its hinterlands.It mainly focused on investigating employment linkages between ruralrnhouseholds and town enterprises. This study employed a cross-sectional survey design. On thernother hand, the study used multistage sampling techniques to select the target population.rnAdditionally, the study employed both qualitative and quantitative methods to collect the data.rnTo obtain quantitative data, the study used structured questionnaires whereas qualitative datarnwere obtained through field observation, document review and semi-structured interview.rnMoreover, the study used both primary and secondary data sources. The data was analyzed byrnusing descriptive statistics such as frequency, percentage, minimum, maximum, mean andrnstandard deviation. In addition to this, the researcher used interview and analyzedrnthematically.According to the findings of the study, the rural workers and urban enterprise facedrndiffrent problems such as shortage of capital or income, infrastructure, working areas, lack ofrntraining and skills.The results of the study indicated that the rural non-farm activity in the studyrnareas were small. In terms of the transactions of agricultural and livestock products, the studyrnfound out that there was a strong market linkages between Debermarkos Town and thernsurrounding hinterlands. The study also examined that employees from the rural areas had nornskills required for the business. Furthermor, most of the factories and enterprise owners hiredrnpeople who are their close relatives and intimate friends rather than hiring them on the basis ofrntheir skills.Accordingly, the researcher attempted to recommend that stakeholders andrnconcerned bodies should create conducive working environments and organize skill trainingrnopportunities for rural households so as to create smooth employment linkages with townrnenterprises. In addition, rural household should work on the rural non-farm employments andrnrural wage employment to reduce unemployment rates.Furthermore, the researcher recommendsrnthat it is better to promote irrigation systems so as to increase and improve agricultural outputsrnand keep the rural households at their usual places of residence. To sum up, stakeholders,rninvestors and concerned bodies should build additional factories in the future in order to creaternmore job opportunities and to strengthen employment linkages with rural households andrnparticularly the institution workers and social affair office should take into account thesernproblems and give skill-based training for rural households and urban dwellers.