The current study was conducted from December to March 2015 with the objective of determining the major causes of defects and quality characteristics of skin and hides and assesses marketing of the raw materials in Adami Tulu-Jido Kombolcha and Bora woredas. A total of 768, (382 sheep and 220 goat skins and 76 cattle hides) samples were randomly selected and visually examined for defects at collection centers. Then, 20 apparently health and 20 apparently defective goat skins were selected purposively, salted and sent to tannery for defect analysis and grading at wet blue stage and for physico-chemical laboratory analysis at crust stage of processing. A questionnaire survey was also done with 200 respondents to assess the marketing situation of hide and skins in the study areas. In this case, household producers, butchers, middlemen and collection center owners were interviewed. The study showed that all the skin and hides examined were found to have one or more types of defects. Major defects responsible for the decline in quality of skin and hide were cockle (36.6-68.1 %), flay defect (50.0-55.9%), scratch (29.5-60.7%), scar (19.3-26.2%) and putrefaction (17.5-30%). Brand marks were also detected mainly in 9.6% of cattle hide. The proportions of scratch, flay defect and cockle were higher in goat skin, sheep skin and cattle hide respectively (P