The main objective of this study was to investigate the practices and challenges of primaryrnschools in implementing school improvement program (SIP) to address the needs of s tudentsrnwith special needs. The study was conducted in 5 government primary schools in Gondarrntown where s tudents with special needs were placed. Respondents for this study consistedrnof two educational officers, five school principals, thirty school improvement committeernmembers, .fifty seven teachers and .fifty one studen ts with special needs. Such data gatheringrninstruments as questionnaires (both open-ended and close ended), interviews, focus grouprndiscussions (FGD) and document review were employed to gather the required data. Thernquestionnaires were used to gather data from the teachers, school improvement committeern(SIC) members and the s tudents . Interviews were conducted with educational officers and thernprincipals. FGD also conducted with 6 selected teachers. The major finding of the studyrnindicated that the schools' community has increased awareness of the special needs of thernstudents. The school'; leadership and management bodies were found to be supportive to therneducation of children with special needs. The study also revealed that there is increasedrncollaboration and cooperation between special needs education and regular educationrnteachers. On the other s ide, the findings of the study indicated that the teaching learningrnprocess has not been carried out in line with the special needs of students. The schools'rnphysical environment was not easily accessible to children with difficulty in mobility. Inrnaddition, the schools' effort to involve student with disabilities, their p arents and specialrnneeds education teacher in school decision making is low. The SUPPO/1 of woreda educationrnoffice and zonal education department to the education of children with special needs wasrnalso found to be limited. The s tudy indicated that lack of skilled man power (special needsrneducation teachers) and financial and material resources were the most severally affectingrnfactors of the implementation of the SIP in relation to special need education. Based on thesernfindings, the researcher would like to conclude that the status of primary schools in thernresearch area in imp lementing the SIP in relation to special needs education is low