Healthcare wastes generated in Hospitals from medical activities have not given sufficient attention. In developing countries, healthcare wastes are still handled and disposed indiscriminately creating an immense threat to the public health and the environment. This situation is much worse in Ethiopia where there is paucity of convincing evidence about healthcare waste generation rate and management system. A cross-sectional study was conducted in St. Paul’s referral hospital to evaluate the healthcare waste management system. Primary data on the healthcare waste management system was collected using observational checklist. Key informant interview guide was also employed on 13 selected informants to assess waste management practice and analyzed by thematic framework. The results revealed that there was no segregation of healthcare waste by type at the point of generation and disinfection of infectious waste before disposal. The main HCW treatment and disposal mechanism was incineration using low temperature, single chamber incinerator; open burning; burring in to amputation pit and open dumping on municipal dumping site as well as on the hospital back yard. Furthermore, there was negligence, attitudinal problem and low level of awareness about safe healthcare waste management. To diminish the risk of healthcare waste on public health and environment, a cost-effective intervention includes providing better medical waste management facilities, adherence to national regulatory and rising awareness of all concerned need to adopt in the hospital.