The purpose of this study was to assess the implementation and challenges of continuous assessment in Physical Education in some selected secondary schools in Getema , East Wollega Zone of Oromia Regional State. The method of the study was descriptive survey research. The subjects in this study were 216 students and 4 physical education teachers. Random sampling technique was employed to collect pertinent information from the respondents. Data were collected through questionnaire, Interview and observation check lists. The questionnaire in the study had two major categories. The first of which consisted of 14 items underlying students’ perceptions about principles and importance of CA. Category 2 which consisted of 10 items focused on implementation of Continuous Assessment (CA) to improve students’ performance. Observation checklist which consisted of 15 items was applied to see teachers’ actual classroom practices of CA. Interviews were conducted with the all physical education teachers. The collected data were analysed using frequency, percentages. In the first phase, the study revealed that students and teachers perceived positive about the principles of CA although it was found out that they did not implement as they perceived it. In the second phase, the finding was that almost the implementations of continuous assessment in these selected schools were poor due to challenges such as time constraints, large number of students in the class, students’ inability to practice theory, and so on. Therefore, it is recommended that physical education teachers and students should practice the way they perceive and recommended that teachers should implement continuous assessment not only for the sake of evaluating and marking students’ result but also for the sake of creating self-managed students Key words; Continuous assessment, physical activity and physical education.