The study was aimed to analyze the factor that challenges the street vendors as well the AddisrnAbaba city authorities face to manage street vendors and keep the city in order. 140 streetrnvendors were chosen from five selected sub cities. Since no registered street vendors, the samplernsize of the selected street vendors from the sub cities were taken based on proportionate of legalrnregistered traders In This study, four major challenging factors faced by street venders during thernoperation of their task were identified to be financial constraints, problems of work environment,rnproblems of social security and environmental problem. Interestingly, according to this study,rnstreet vendors create an enabling environment to improve oneâ€˜s livelihoods and to support thernfamily. In addition, they were found to offer low priced commodities for the poorer segment ofrnthe society. Nevertheless, street vending was also found to create traffic congestions and hinderrnfree movement of the pedestrians. Besides they were attributed to weaken cityâ€˜s economyrnbecause vendors do not pay trading tax. But, there are still conflict between authorities andrnvendors over licensing, taxation and encroachment of public places and pavements. In spite of itsrncrucial role for providing employment and livelihoods to both urban and rural poor, its economicrnimportance was rarely recognized either in national poverty reduction strategies or in cityrngovernance initiatives. Therefore, appropriately addressing the practical reality of the workrnprocess and the role of vendors in the urban economy, and effectively protect vendorsâ€˜ basicrnrights to livelihood and property. providing free-space, regulating the street vendors by issuingrnlicense, providing training and credit, developing small-scale agro-industries in rural areas,rnincluding permanent markets and working places in the master plan of a city were recommended.rnKey Words: Street vendors, City Authorities, Challenging factors