ABSTRACT The general objective of the study was to assess the challenges and opportunities of community sport development in South Gondar zone. The research provided answers for questions raised on the community sport development challenges and opportunity and its effect on the sport development, human resource, financial resource, sport facility and equipment in study area. In order to come up with answer to the research questions, the research identified the target population and determined the sample size using simple random sampling method, sample size covering area taking in to account nearness to the researcher geographical area 13woreda 5 city administration but it accounts 267of simple random sampling selected 4 city administration and 5 woreda selected. From this total population purposively selected 132 populations. Descriptive study to represent accurate profile of situation and explanatory study to identify causal relationship of variables, implemented survey and archival data collection strategies to gather the primary data youth and sport office leaders, community sport officers, mass sport coordinates and some selected sport committee and secondary data community sport participants of South Gondar zone 2009 E.C annual report, followed deductive and quantitative data analysis approach and procedures. The research result has indicated that the some opportunity for community sport participant in South Gondar zone was created on some multisport environment. This includes community recreation center participants, sport for all participants, and fitness well-being participants in the study area was checked. This result was given some opportunity but it was not enough that participants’ befitted on community sport programs and also community itself actively participated. Because in south Gondar zone had different major challenges that affected community sport development stated goals implementation and practice of community sport. The result entailed adverse impacts on sport development. Those major challenges of community sport development in south Gondar zone was scarcity of finance (sport budget), lack of human resource, of capacity building, knowledge, coordinate working, awareness and inadequate sport facility and equipment. Thus, the researcher concluded that the community sport development of South Gondar zone was unsatisfactory result. Some of the recommendations forwarded in this research were that the South Gondar zone organization should practice and coordinated the community sport activities at its condition should be creating clearly awareness for participants, should give due attention to sport finance (budget), human resource knowledge, and capacity building, sport equipment and facility, coordinate working, create favorable conditions and arrange continuous trainings to sport stakeholders for awareness of community sport development. Government and non government organization, community members, sport experts, those were given attention for the contribution of constructed stadium, recreation center, gymnasium and financial support.