Ethiopia's government has been attempting to promote economic growth and development by developing comprehensive national industrial policies and strategies. Accordingly, the study aims to analyze the industrial policy formulation practices, challenges, and prospects in the Adisabeba city administration. Under this applied research, a mixed research methodologies and methods have been employed to investigate the practices, challenges, and prospects of industrial policy formulation. The researcher has employed questionnaires, observations, and document reviews to collect data from key informants. Thematic content analysis has been employed to systematically describe and categorize the meaning and content of qualitative data. Furthermore, a descriptive method has been utilized for the quantitative aspect of the data. The study shows that the city administration has good experience in adopting industrial policies and strategies and pursuing a top-down policy-making approach under the ideological and policy direction of the central government. Recently, the city administration has developed a lot of legal and intuitional procedures, regulations, and public institutions that help policy design and enforcement concerning the city's development. The study also shows that the city administration has been challenged with a lack of a comprehensive industrial strategy, corrupt practices and a rent-seeking conscience, poor oversight and accountability mechanisms, and a weak institutional set-up to monitor and evaluate the policy process. Finally, the researcher advised the city administration to introduce a legal framework that prevents misconduct and rent-seeking behavior; an institutional framework that promotes the expansion of private financial enterprises; and a strong policy control and evaluation system in the policy process. Keywords : industrial policy, formulation, implementation, monitoring, evaluation, policy-making DOI: 10.7176/JESD/14-5-01 Publication date: March 31 st 2023