n Ethiopia, including Bahir Dar city, population growth increases rapidly, while at the same time, the need for mobility and expansion of infrastructure demand increases. Bahir Dar City has a persistent financial challenge and infrastructure gaps which requires a sustainable funding source. Therefore, implementing alternative financial sources using a land value capture mechanism in land value increment resulting from public infrastructure development is vital to solving infrastructure gaps and quality of services. Hence, this study aims to assess urban land value capture practices in Bahir Dar city as an alternative financial source for municipal revenue. This study employed both a quantitative and qualitative approach. Both primary and secondary sources of data were used. In total 168 households were chosen by systematic random sampling technique for the survey. Besides, 8 in-depth interviews and 1 FGD were conducted using participants selected purposefully based on experts' experience and positions. The survey data was analyzed in descriptive statistics. The findings revealed that the municipality tries to practices to capture the increased land value resulting infrastructure development through public land leases and urban land rent is insignificant due to outdated benchmark prices. As a result, on-the-ground land value capture mechanisms were not effectively implemented and practiced in the city. On the other hand, in the perception of the society the findings of the study show that the land parcel located in cloth proximity to public infrastructure development and CBD directly increase the value of land, which indicated that positive relationship between them. Hence, this positive relation suggests the necessity of implementing land value capture mechanisms in Bahir Dar city. The findings of the study indicate that 75.5% of residential landowners are unwilling to pay for the uplifted value of land resulting in public infrastructure investment. Stakeholder engagements, political will, well-organized institution, good land registration, and cadastral system are also others essential to implementing LVC mechanisms appropriately. Based on the findings this study suggested that the government should select and implement appropriate land value capture mechanisms to capture value increments that fit the local context and community acceptance