The main purpose of this study was to examine the practices and challenges of students’ assessment in ECCE in government primary schools specifically in O-class teachers at Dehana woreda administration. In order to achieve the purposes, the researcher used qualitative research approach with a specific case study design. The researcher selected five (5) clusters from a total of 13 and five (5) government primary schools from a total of 15 purposively. From those sample schools, five (5) teachers from a total of 10 O-class teachers and five principals from a total of eight (8) primary school principals were selected using purposive sampling method. To obtain relevant data, the researcher used semi-structured interview as a means. Eight (8) semi-structured interview items that aimed at exploring concepts, purposes, principles, areas, methods and challenges of assessment were employed to gather the required data from the selected participants. Besides, the researcher used document analysis and observational check list as a means to collect data for triangulation purpose that testify the data gathered from the participant teachers and principals through interview. After the data have been collected and recorded, that were sketched, checked and edited for analysis purpose. Then after, the collected data were analyzed using themes (direct quotation, narration, paraphrasing and interpretive analysis techniques.) The findings of this research revealed that participant teachers and principals have the knowhow of the concepts of assessment. However, they lack the knowledge of purposes of assessment, principles of assessment and multiple methods and areas of assessment. Concerning their assessment practices, they mainly assess children’s learning progress in every fifteen (15) days at a regular session through tests and observation. Hence, the practices related to ECCE assessment were limited. The mere presence of lower order knowhow on the purposes, principles, methods, and areas of assessment is not a guarantee for generating competent students and even setting a fixed date to conduct assessment will not be effective to fix the gap of children in each contents. Finally, it is recommended that, government offices, colleges and universities shall work to create awareness and give training so as to improve teachers’ and principals’ knowhow and practice of children’s learning assessment.