The purpose of the study was to assess factors affecting the implementation of industrial extension services provided to MSEs by TVET institutions and its challenges and opportunities taking enterprises in Yeka sub-city, Addis Ababa. Descriptive research design was employed as the purpose of the study was to assess the current status of IES implementation. The sampling method used in this study was simple random sampling technique. To collect data from 60 respondents in cross-sectional data (data collected at one point in time) collected from the primary sources, and secondary sources like review of assessment documents. In the process of answering the basic questions, a questionnaire that included demographic profiles of the enterprises, factors that affect the industrial extension services in MSEs and the challenges they face in technical trainings were designed in a closed/open ended and likert scales. After the data has been collected, it was analyzed using descriptive statistical techniques such as percentages, frequency, and mean. It shows that lack of their own land (shade area) to run their business, financial access given by micro finances or other lending institutions, inadequate access to business training, firm competition in the market place, access to technology and access to raw materials were the key economic factors that affect the industrial extension services in MSEs. The administrative bodies are required to create an enabling environment for the growth and development of MSEs, but this study found that lack of market access, high amount of tax, insufficient training, lack of business skill for transaction, interest rate charged, lack of understanding the manipulating of new technologies, poor infrastructure of the land of the country(land escape), quality product, integration between the trainer and trainee, prevalence of advertizing their work, lack of managerial skill and all legal and regulatory environments were the main factors that affect industrial extension services.