The Government of Ethiopia (GoE) has demonstrated commitment to expand higher education science and technology (S and T) programs to spur and support its growth and transformation agenda. Ethiopia has made a tremendous advance in access to higher education over the past decade. This rapid expansion, however, has raised concerns about quality. Many students are entering universities with a low level of academic preparation and a weak mastery of English. Qualified faculty are in short supply, especially in science and technology. The higher education relevance and quality agency (HERQA) was established in 2003 to implement a quality assurance system for higher education, but it lacks the resources to carry out its mission. The purpose of this report is to identify the main challenges facing the sector and propose a policy agenda to address them. The analysis is based on information from the ministries of education and of S and T of Ethiopia, a review of relevant literature from Ethiopia and elsewhere, and an analysis of data and information collected from stakeholders at public and private universities through semi-structured interviews. The report contains five chapters. Chapter one presents background information and the study’s methodology. Chapter two provides broader analysis of demand for skills, graduate employability, feedback from employers on skill supply, and the relationship with the economy at large. The third chapter analyzes the recent developments in S and T higher education. Chapter four assesses the research performance of Ethiopian universities. Chapter five summarizes the key reform options and policy measures to improve the performance of the higher education S and T system.