The main purpose of this research is to assess the challenges and prospects of religious tourismrndevelopment in Gishen Debre Kerbe Mariam. Data were collected through self-administeredrnquestionnaire, direct/participant observation, semi structured interview, informal discussion andrnmanaging second01Y data. Categorical, explanatory and descriptive methods of qualitative datarnanalysis techniques were employed for data interpretation. Eleven resources were identified asrnpotential attraction for religious tourism development in Gishen. Except museum which wasrnunder construction, resources such as landscape and scenery, religious festival, churchrnbuildings, history of Gishen Mariam, holy water, cave of king Lalibela, and Natural cave werernbeing utilized and rated as attractive resources for majority of respondents. Poor pelformance ofrnmarketing, poor inji'astructural development especially road, illegal settlement, Environmentalrnpollutions and begging, and unsuitable institutional structure were identified as challenges tornreligious tourism development in Gishen Mariam. Despite these challenges, an increase trend ofrndomestic religious tourist arrival by 11.8% for the last four years was registered in GishenrnMariam. This has contributed to an increase in contribution of job creation and governmentrnrevenue. This in turn has resulted in positive attitude of local residents. Moreover, its geographicrnlocation in the northern historical route is an opportunity for boosting religious tourism. GishenrnDebre Kerbe Mariam has huge religious tourism potential and prospects despite challenges.rnIllegal settlers need to leave away jrom Gishen in order to make Gishen a monastely.rnFurthermore, road construction and tourist facility developments need to be implemented inrncooperation with volunteers and church.rnKey Words: Development, Gishen, Religious, Tourism,