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Ecotourism has emerged as a new hope of the tourism sector and is expected to overcome past pitfalls of mass tourism. Therefore, the purpose of this paper is to assess the potentials and challenges of ecotourism development in the historic and sacred sites of North Shewa Zone, Ethiopia.

Data were collected through interview, household questionnaire, field observation and focused group discussion. The collected data were analyzed using Statistical Package for Social Science (SPSS version 23) and Excel.

Based on household’s perception, churches and monasteries were mentioned as the main (17.58%) ecotourism attractions that have crucial role in ecotourism development in the area followed by biodiversity resources (17.23%) and Holy Water (16.01%). These existing ecotourism potentials and opportunities were discussed on the basis of five dimensions, i.e. historical and sacred attractions, biological attractions, cultural attractions, infrastructures and institutional potentials. The mean score values of a five-point Likert scale level of agreement or disagreement of respondents were between 2 and 4.5, implying overall responses of respondents spread between agree and strongly agree.

The findings reveal that although the historic and sacred sites of the area have potential ecotourism opportunities, different anthropogenic activities are affecting its development. The researchers recommended awareness creation programs, promotion of sites, development of infrastructures, employments of well-trained professionals and allocation of sufficient budgets as a mechanism to use the ecotourism potential and solving the existing challenges.