Communities have their own capitals to contribute their resource in local economic developmentrnand they have also their own cultural and behavioral resources of interface with their immediaternnature and nurture. From the standpoint of local economic development, there is a strong reliancernon local resources, leaders and institutions to respond to locally based economic crises andrnopportunities. In light of this, the main objective of this study has made an effort to assessrncommunity participation in sustainable local economic development and the specific objective ofrnthis study were to examine and evaluate participation, roles and responsibilities, factors affectingrneffective participation, the challenges and opportunities of community participation in localrneconomic development. For its methodological convenience mixed approach research designrnmeaning that both qualitative and quantitative research approaches are used. Under qualitativernmethod non probability purposive sampling techniques have been employed and in quantitativernmethod probability sampling techniques have been employed. The study participants have beenrnsub city, kebele, and ketena and mender level development committees were participated in thernin FGD session. Moreover, the members of ketena, kebele, sub city and town level activernparticipants from the communities were participated in survey questions. Besides, the town levelrncommunity participation development offices heads, sub city level community participationrnofficers, the sub city level community participation development offices heads and officersrnparticipated in the interview session. The major finding indicates, community participation andrnlocal economic development are two intertwined issues. Community participation plays a veryrngreat role in identifying development queries and challenges that were raised in compliantrnhandling. Local economic development has become one of the key development interventionsrnand focuses on economic challenges which manifest the communities in unique localities.rnDespite widespread recognition of the need of community participation in sustainable localrneconomic development, in reality community participation builds a sense of communityrnownership, assures sustainability and responsibility for project activities. At last the resultsrnobtained were job opportunities were create, saving culture was developed, partnership ofrndifferent institutions were developed, training and consultations were more encouraged. Finally,rnthe community participation in sustainable local economic developed created strong social,rncommunity capital and developed sense of ownership with a very great confidence.rnKey words: Community capitals, community participation and local economic development andrnsustainable local economic development