The purpose of this study was to investigate the health service delivery by private health sector and develop guidelines to enhance provision of health service so as to increase their contribution in the country’s health system. Interviews with 1112 participants were conducted in phase I. Descriptive statistics, chi square tests and logistic regression analysis were used for analysis. Private health facilities (30.5%) were providing healthcare services in their own buildings that were constructed for that purpose while others work in a rented houses built for residence or others. Some facilities (11.7%) received loan services from financial institutions in the region. A significant association was found between obtaining loan and owning building for healthcare services delivery (x2=13.99, p<0.001). Private health facilities were mainly engaged in profit driven and curative services while their participation in the promotive and preventive services like FP, ANC HIV test, TB and malaria prevention and control was not minimal. Majority, 247 (96.5%) provide services for extended hours out of normal working time such as evening, weekends and holidays. Physicians, more than other professionals were found practicing part time work (dual practice). Service consumers of the private health sector were urban dwellers 417 (71.6%) and 165 (28.4%) rural residents. Nearly three-fourth (73.0%) of study participants had a history of multiple visits to both public and private health facilities for current medical condition. Median payment of patients in a single visit including diagnosis and medicine was 860 birr ($30.85) (IQR = 993 ($35.62). Only 2.1% have paid through insurance services while others through out of pocket payments. Price of services delivered in private health facilities were set mainly by owners’ will (91.4%) while others with established team. Satisfaction on the fairness of prices to services obtained from each facility were reported by 63.1% service consumers. Those patients without any companion (AOR=1.83, 95% CI=1.16-2.91) and no history of visit to other facilities (AOR=1.97, 95% CI=1.24-3.12) were more likely to be satisfied than those coming with companions and those with history of visit. In addition, as age of consumers increase, satisfaction to services prices tend to decline (AOR=0.97, 95% CI=0.96-0.99). Uncomplimentary regulatory system to private health facilities, lack of training and continuing education for health professionals, unavailability of enough health workforce in the market and shortage of supplies to private facilities were among main gaps disclosed. Based on findings, five guidelines were developed to enhance health services delivery in the private health sector, namely, increase facilitation for financial access to actors in the sector, increase facilitation to access regular updating trainings and continuing education for healthcare workers, enhance and scale up the capability of existing association in the private health sector, strengthen and support working for extended hours to promote user friendly services and accessibility of healthcare services for the poor through community based health insurance and exemption. Therefore, these recommendations to help enhance the private health sector for better performance and contribution. / Health Studies / D.Lit.Phil (Health Studies