The overall significance of tourism in general and religious tourism in particular has got recognition rnfrom different scholars and organizations. However, its development mainly in Africa has faced numerous rnchallenges. Ethiopia is unique and sacred in Africa for the ancient two monotheistic world religions rnnamely Islam and Christianity. The existence of the ancient religions together with traditional African rnbeliefs and their spiritual elements, made Ethiopia most preferable religious tourism destination in rnAfrica. One of the ample religious sites of the country, Lalibela town, is the study area. The objectives of rnthis study entitled with 'Religious Tourism Development: The case of Lalibela town Amhara region, rnEthiopia' are identifying the religious tourism development challenges and opportunities, assessing rnmechanisms that help to promote opportunities and minimize the challenges of religious tourism rndevelopment, Analyzing the ways in which religious tourism can serve as a tool in conserving heritages, rnempowe ring communities and bringing sustainable development. The study is hoth qualitative and rnquantitative in its design. Interview, questionnaire non participant observation, and document analysis rnare the mail! data gathering tools used in this study. The quantitative data collected were analyzed using rnSPSS (Statistical Package for Social Science) and presented through tables, graphs and charts where as rnthe qualitative information were precisely narrated. Accordingly, the findings of the study demonstrated rnthat the town of Lalibela is one of the most impressive religious tourism destinations in Ethiopia. The rntown is endowed with ample religious attributes. However, there are also challenges influencing the rndevelopment of the site as the most successful religious tourism destination in the country. These rnchallenges of religious tourism development in Lalibe/a town are properly identified in this study. Thus, rnminimization or alleviation of all identified challenges and effective promotion and utilization of rnopportunities with proper involvement of the local community would enahle religious tourism to be an rneffective instrument for local community empmverment, heritage conservation and sustainable rndevelopment in the town as well as the country at larg