The major objective of this study was to assess the problems, challenges and opportunities facingrndomestic tourism development in Aksum. This thesis has applied the combination of qualitative andrnquantitative research methods. The research instruments included questionnaires, interviews, FGD,rnDocument analysis and unstructured personal observation. The study has gathered data from 150rndomestic visitors who visited the area during Hidar Tsion festival. Moreover, questionnaire survey wasrnemployed to 100 local communities out of which 84 were used for further analysis. In addition to these,rnsemi-structured interviews were conducted on 25% of tourism businesses (hotels and restaurants) in thernarea. Based on purposive sampling method, interviews were conducted with traditional costume andrnso uvenir shops, Religious Travel Organizers, travel intermediaries and public touri sm organs. OnernFGD was also conducted with a group of 7 members comprised of different tourism stakeholders in thernarea. The data gathered through questionnaire survey were processed in SPSS Version 17.0 and tallied,rntabulated and analyzed through descriptive statistical tools. Data gathered via qualitative methods- semistructuredrninterview and FGD were analyzed thematically and narrative analysis. Results demonstraternthat, the domestic tourism is not well developed in the study area due to multitude of demand andrnsupply related factors. The former include: lower level of income, lower travel culture of the people,rnlack of free time, and lack of information about the sites. The later include: escalation of cost ofrnaccommodation and price of food and beverage (on Hidar Tsion and Hosaena fe stival s), problem ofrninfrastructure, unequal treatment of domestic tourists with internationals, low promotional andrnawareness creation activities and the lower attention given by travel intermediaries. Moreover, domesticrntourism development in Aksum is challenged by seasonality where most of domestic tourists visit thernarea in one or two rel igious events. Hence, there is a need to have a nationwide domestic tourismrndevelopment strategy, undertaking promotional and awareness creation activities, and developing thernnecessary infrastructure.rnKey words: Tourism, Domestic Tourism, problems, challenges and Aksum