Urban informal sector plays a crucial role in creating employment opportunities for unemployed and it is also a livelihood for millions of people in developing countries like Ethiopia. Therefore, this study aims to the survival mechanism of female headed households in the urban informal sectors in Fiche town. In the study the reasons for the females becoming the head of the households, the types of informal activities, factors that forces these households? heads to join the informal sector, problems and government plan towards the informal sector are seen. Moreover, the government policy and non-governmental organizations activities attempt to alleviate the problems that most FHHs have faced financially by giving credit services. On the bases the findings of the study it is recommended that concerned bodies need to create awareness, prepare different trainings, give credit on time and follow-up activities of female household heads in Fiche town.