A study was performed from September 2009 to August 2011 to identify the major challenges and prospects of village-based exotic chicken production in Amahara Regional State. In this study ,village chickens were found raised mainly for income generation (76.0%) and home consumption (14.5%).The exotic chickens in this study were kept in scavenging type (61.5%) feeding with seasonal supplementation of grain .Among the maim problems related to poultry feed preparation are less availability of feed ingredients (48%) both in quality and quantity. It was found that individuals engaged in chicken rearing activities had higher preference for LOH (27%) than RIR (22.0%) breeds. But RIR breeds (52.5%) were more adapted the existing environmental conditions than LOH breeds. About 81.5% of respondents were found able to construct separate chicken houses and 94% of the respondents have incriminated disease as the most important constraint for chicken production. The overall mortality rate of distributed exotic chickens in the three agro-climatic zones of Amahara regional State was 45.00%. The mortality rate of LOH breed of chicken (29.34%) was found higher than that of RIR (16.18% ). There was also statically significant difference (p<0.05) in mortality rates between the two breeds of chicken. The present study indicated that the exotic chickens distributed in mid-altitude areas were with low mortality rates than high and low-altitude areas. Therefore, the bureau should fill the gaps with respect of inputs like identifying areas where exotic chickens adapt more, extension services and health and feeding packages for better implementation of the strategy.