The purpose of this article is to look in to Ambo urban government institutions’ organization and operational efficiency by employing good governance as a framework for analysis. To achieve the research purpose, this article employs a qualitative research approach. Qualitative techniques namely document analysis (analysis of relevant regional laws), interviews, and focus groups were used to collect qualitative data. According to the findings of this study, Ambo urban administration has been given significant legal responsibilities and powers, the autonomous workout of which, directed by good governance principles, could result in overall development. Nonetheless, the study also discovers that a variety of factors, including the Oromo people's dominance in urban government institutions, have a negative impact on the city's governance quality. Other significant factor is the scarcity of efficient checks and balances mechanisms at both the urban-regional (vertical) and intra-urban (horizontal) levels of government. According to this study, this situation has been exacerbated by political aspects of the urban administration, as well as deficiencies in the legislative framework. As a result, the research's main recommendations emphasize consolidating vertical and horizontal check and balance mechanisms as well as the importance of better managing the ethnic diversity of the urban administration.