The major goal of this study was to assess state of good governance in Arada sub city. Thernresearch was conducted in Arada sub city which was selected randomly. The specific objectivesrnof the research were to examine the extent to which good governance practice applied in thernArada sub city; assesses the perception of public officials and employee towards the practicerngood governance in the sub city and to identify the perception of service users towards thernpractices of good governance in Arada Sub city. Among 10 sub cities in Addis Ababa town,rnArada sub city was selected randomly. Survey research design was used for this study. Tornachieve the objectives of this research both qualitative and quantitative data were used. Primaryrndata were collected from employees and officials of the institution (96) and service users (110).rnSecondary data were collected from pertinent sources like institution reports, magazines,rninternet sources and others. Semi structured interview schedule was used for employees andrnservice users and questionnaire was employed for officials to collect data from them. Data werernanalyzed using percentage and frequencies, tabulation, figure and the like. Participation,rnaccountability, transparency, equity &equality, effectiveness and efficiency were taken asrnindicators of good governance. The perception of majority of the service users were ranged fromrnlow to medium. On the other hand, the responses of employees and officials for the samernindicators ranged from medium to very high. Besides, the study identified that the intention of thernsub city to involve the service users in major development programs was low. Conductingrnperiodic surveys, designing participatory development programs, and involving the service usersrnin major decision that concerns the community will have immense contribution for futurerndevelopment and effective service delivery in the sub city.rnKey terms: governance, good governance, transparency, participation, accountability, equity andrnequality and effectiveness and efficiency