There are achievements obtained from the implementation of occupational competency assessment and certification system in Technical-Vocational Education and Training (TVET,) including improvements in quality and relevance of TVET provision. The implementation in Ethiopia in general and specifically in Addis Ababa city administration has faced with many challenges with different nature. This research study aimed at investigating the practices and challenges in the occupational competency assessment and certification system implementation in TVET in Addis Ababa city administration. The study used a mixed research design, employing both quantitative and qualitative data. The sample population taken for this study were 20 management members at Federal TVET Agency and Addis Ababa City Administration Competency Assurance Agency, 140 regular trainees from level 1-5, 30 MSME operators, 50 industry workers, 140 short term trainees in manufacturing sector, 20 assessors, 20 supervisors, and 20 trainers, a total of 470. Purposive sampling, expert sampling, quota sampling and simple random sampling techniques have been used. The data has been collected using questionnaires, interviews, focus group discussions and secondary sources such as reports, broacher, and policy documents. Frequency distribution, percentage and mode are statistical measures mainly used and correlation and casual analysis approaches were utilized to analyze the quantitative data. The qualitative data obtained through interview, focus group discussion were analyzed using qualitative analysis mainly deductive, inductive and interpretative analysis methods. The finding revealed that the extent of deviation of practice of occupational competency assessment and certification from the standard procedure and principles was beyond acceptable level. Incompetent and unethical assessors, poor quality assessment centers, rent seeking practices and interference of training regulator are some among major challenges. Weak leading and implementing capacity of the federal and city administration of occupational competency assessment and certification body is fertile ground for the challenges to be muscular. The incapability of the leading and implementing body is basically manifested by inability to implement the system as per the standard procedures and principles. Lack of quality in occupational standards and assessment tools is because of unable to mobilize industry and create ownership. Practices out of standard procedures in developing and engaging assessors and assessment centers are indications for the incapability of proper implementations. Backward handling method of assessment tools and certification process has resulted in poor security and inefficient service which has laid good foundation for rent seeking practices and lack of good governance. The challenges encountering the implementation of occupational competency assessment and certification could be mitigated through enhancing the leading and implementing capacity of the federal and city administration bodies. This could happen through restructuring of current disabled and poorly staffed structure and keep continuous capacity building and improvement. Utilizing technologies in the entire process, from registration to the certification, is also part of sustainable solutions for the challenges.