Play materials assist teachers in transmitting, organized knowledge, skill and attitudes to children in preschools. In this study, availability of play materials, utilization of play materials and challenges that teachers face while using play materials were explored. Qualitative research method specifically exploratory design was employed. The study sampled three preschools using purposive sampling technique. Purposive sampling technique used for teachers and compressive sampling technique used for principals. Data were gathered through semi structured interview and observation checklist. Ten teachers and three principals participated in the study. The findings showed that the availability of outdoor play materials are inadequate as compared to the high number of children enrolled in KG, and the accessibility of indoor play materials is low due to the lack of facilities of play materials in the preschools. The finding also revealed that better use of the available play materials in the teaching learning process, lack of adequate indoor and outdoor play materials are the major challenges in the selected preschools, lack of adequate playground space is the 2 nd major challenges in the selected preschools, lack of standardized curriculum, inadequate playground space, lack of feeding room and rest rooms. Based on these findings, the researcher suggests those preschools to have adequate outdoor play materials and indoor well organized learning corners with adequate play materials which are recommended by the Amhara National Regional State Education Bureau. The investigator also propose preschools to have adequate playground space and separate rest room and feeding rooms in order to ensure children’s health, and safety.