Abstract Coalition politics is a usual kind of governance in countries characterized by ethnic diversity, parliamentary form of government and majoritarian electoral system. Ethiopia is home of multiethnic societies with ethnic based federalism, which bred formation of political parties along ethnic lines, and parliamentary form of government and majoritarian electoral system. Thus, coalition politics is the most plausible kind of governance in Ethiopia. However, there is no exhaustive and ample study about coalition politics in Ethiopia. So, this study is about drawing lessons by studying EPRDF coalition formation, its structure, power sharing trend and modes of operations that derived from coalition formation with their implication on state governance using Coalition theory as theoretical lens. In doing so, the study applied qualitative approach supported by phenomenological research design with primary and secondary data source which are thematically analyzed. The study find out that EPRDF coalition is formed in a way that contradict basic assumptions of coalition theory. The study proved also there is a discrepancy between EPRDF, governing coalition, structure and that of state structure and principles of federalism. Generally, EPRDF coalition formation, structure, power sharing trend and modes of operations contradict with core assumptions of coalition theory, basic principles of federalism and tenets of democracy like equality, fairness, representation and inclusiveness. This makes EPRDF challenged by division, suspicion, and competition among member parties which later divert their attention into how to win the competition than delivering interests of the general public. Finally, the study identify lessons drawn from findings of the study for an ongoing and potential coalition endeavors. First, coalitions in every contexts and particularly in federal states should consider to foster inclusiveness and collective governance by synchronizing their arrangement with the state arrangement. Second, the formateur actors in the coalition should have a share of large population size; thirdly, the members of the coalition should have balanced power/status; and fourthly, the members in the coalition should have to reach consensus over ideology, power sharing issue, structure and modes of operations. The study identify also future research directions. Key Terms: coalition formation, formateur actor, coalition governance, coalition structure, power sharing trend, modes of operation.