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This study examines the challenges and prospects of Community Based Ecotourism development in Ethiopia with special focus on Wenchi Crater Lake. Descriptive research design was employed with 194 sample representatives selected through simple random sampling technique and purposive sampling for quantitative and qualitative data respectively. The data were collected through key informant interview, informal discussion, questionnaire survey and field observation. The finding shows that contrary to the lake’s greatest potential for community based ecotourism, conflict of interest over resource usage and ownership of the lake, unfair benefit sharing, incapability of ecotourism business to benefit the local community equitably, inability of ecotourism to substitute traditional agriculture, illegal land marketing and tension among local community are encumbrances that can impede the sustainability of ecotourism of Wenchi. As a result of such challenges, the sustainability of community based ecotourism development of Wenchi Crater Lake is uncertain despite its potential.   Key words: Challenges, prospects, Community Based Ecotourism, Wenchi Crater Lake, Ethiopia.

Development of community based ecotourism in Wenchi Crater Lake, Ethiopia: Challenges and prospects