The purpose of this study was to explore challenges and opportunities of the Ethiopianrnfl oriculture industry in the global commodity chain by describing the structure of thernchain, examining governance structure and upgrading response of producers in light ofrnglobal buyers. A cross-sectional survey with Questiotmaire method was used to collectrndata form seventeen floriculture firm s, who statted exporting before 2006.rnGlobal commodity/value chain approach was used to see chall enges and opportunities ofrnthe industry in entering into global market and chain elements that are dealt in this studyrnare input-output structure, governance structure, upgrading activities, and institutionalrnframework.rnAs the findin gs of this study h ave revealed, input supply system of the Ethiopianrnfloriculture chain is not well developed. As an output, flori.culture industry producesrndi ffe rent varieti es of Rose flower and no indigenous varieties of flowers are found on thernproduction and ex po rt. This product is targeted to auctions and who lesal ers in thernEuropean markct. This market is high ly developed and so phi sticated in terms of thei rrnrequirement regarding quality, consistent supply and timely delivery. To meet thesernrequirements, produce rs in Eth iopia should make high investment on the production , postrnharvest faci lities and logistics. This has shaped the structure of the fl ori culture industry inrnthe country that only those producers who are capable to make such investment canrnparticipate in the chain while small producers are structurally excluded form the chain.rnOn the other hand, governance structure of the chain is more of implicit type, the marketrnbei ng main governing body. Majority of producers have not entered yet into the mostrnpro fitab le as well as demanding chain, a retail chain, which is characterized by standingrnorder and ex plicit coordination of the supply chain. In general buyers set product, processrnand logi stic parameters and use di fferent mechanisms to transmit their requirements. Inrnthe case of auctions and wholesalers, agents seem to playa lead role while su permarketsrnap pear to coo rd inatc more explicitl y. In all cases the power of buyers emanates from theirrnunderstanding of market demand and holding marketing infrastructure than Ethiopianrnproducers. Upgrad ing by producers is limited due to lack of financial, organi zational andrninformation capabi lity especiall y among domestic producers. Moreover, lack of researchrnand innovation and low insti tutional backup in the country has limited the upgradingrncapabi lity of Iloricul ture industry. As a consequence, competit'ive advantage of Ethi opianrnfloricu lture industry lies only on the natural and basic production factor s.