The study has revealed that,Addis Ababa city administration enjoys wider sources of revenue. Thus,it generates and collects revenue from tax,non-tax,capital,municipal and external sources.It is observed that tax revenue on average contributed nearly half of the city''s total income in the period under study.However,despite the good performance of the city administration in generating and collecting of revenues,there are many problems and challenges which hindered the maximum utilization of the revenue potential of the city.The major challenges include poor revenue collection performance, non-utilization of alternative revenue sources, the problem of revenue fluctuations and others.The study has come up with recommendations that should be taken both at the federal government and the city administration level. To this end, proper utilization of alternative revenue sources,empowering the city to administer its own sources of revenue and designing a revenue sharing system are some of the policy implication of this book.