Ethiopia is a country with immense natural resources potential including, among others, agricultural produce, minerals, wildlife and water. The Constitutional provisions, appropriate policies, institutions and legislation put in place are clearly articulated in protecting the environment. However, the challenges of limited public awareness, limited political and bureaucratic commitments in environmental national policy implementation, less commitment of regional and local environmental affiliated offices, few environmental impact assessments and monitoring in huge project implementations of the construction sector and, and manufacturing industries across the country are found to be the major problems associated with the environmental policy issues of the country. This study on Environment Policy Challenges of Ethiopia is basically an attempt to give the highlights of Ethiopian Environmental policy directions and the potential challenges confronting its dialogue. It is a dialogue in the sense that it is still an evolving issue.