The Ethiopian TVET system has been guided by the competence-based training approach since 2008 with the expectation of producing competent workforce in various occupational fields. To what extent the approach is practiced in TVET colleges need to be investigated. The purpose of the study was to investigate the practice and challenges encountered in implementing the competence-based TVET approach, taking the experience of polytechnic colleges in Addis Ababa. The research approach followed in this study was a mixed research, incorporating both qualitative and quantitative methods. This thesis was conducted in three selected Polytechnic colleges, General Wingate, Entoto and Tegbared which are located in Addis Ababa Administration. The respondents’ categories were 104 trainers, 38 trainees, 4 staff officers from Addis Ababa OCACC and TVET and 3 from Industries. The respondents (trainers and trainees) were from General metal fabrication, Construction, Wood works and Manufacturing. The respondents were selected using purposive sampling and data were collected through interview and questionnaires. The collected data were analyzed using qualitative and quantitative data analysis. The finding showed that the current states of Addis Ababa center of competencies is not sufficient enough in terms of human and non-human resources. In addition to this, during the assessment implementation, there is lack of clearness for the schedule of assessment, lack of enough awareness for candidate and delaying the implementation of assessment seasons. Furthermore, there is week integration and there is gap of information between TVET Colleges. To solve these problems, the center should provide enough awareness for trainees, about national assessment, avoid discrimination in the duration of assessment, and avoid unethical assessor’s; increase the integration of colleges. In addition to this, the center collaboration with TVET partners and NGOs share the experience of benefited countries and implement. Addis Ababa city administration gives attention for the organization to fulfill the adequate and qualified human and non-human resources.