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The study investigated the practice of ethnic federal system along with ethnic rights to self-determination and associated conflicts in the context of Southern Regional state of Ethiopia. This study is a qualitative research that employed both primary and secondary sources. The federal system is based on the constitutional conviction that ethnic groups in Ethiopia have the right to self-determination up to secession. By using ethnicity as an instrument to establish the constituent units, ethnic entitlement and political representations, the federal system has uniquely formalized politics of ethnicity in Ethiopia. Practically, the federal system in Ethiopia faces anomalous asymmetries both within the four ethno-parties that formed the Ruling party and constituent units. Despite rhetorically committing to multi–party politics and democracy, the political regime in power is markedly intolerant of political pluralism. The ‘making and remaking’ of the regions and local ethnic political parties in Southern Ethiopia has led to conglomeration of 56 ethnic groups into a single region. Instead of ethnic right to self-determination in accordance with the constitutional principles, the ruling party has gradually put efforts into administrative integration of diverse ethnic groups. This is one of the underlying causes for ethnic autonomy conflicts in the region. It is time for the ruling party to accept the consequences of the constitutional choices, to protect the constitutionally declared principle of federalism, to respect ethnic right to self–governance in Ethiopia beyond ideological and political motives. Key words: Ethnic federal system, the right to self-determination, making and remaking, ethnic autonomy conflicts, southern regional state and party politics.