The notion of developmental state was born with the economic success of South East Asian countries in the 1960s and 1970s. However, the actual definition of the term was first coined in 1981 by Chalmers Johnson. The theory describes the importance of state involvement in the economy of a nation with a view to enhance economic development and prosperity. Ethiopia has been exercising developmental state paradigm since 2002 with different challenges and achievements. Exploring the challenges and achievements of the theory from Ethiopian perspectives is important to draw lessons for other Horn of African countries. Indeed, in Ethiopian context the paradigm has increasingly contributed to the economic growth of the state. It has also its own challenges such as dysfunction politics and leadership that contributed for the prevalence corruption and maladministration in the state. In the Horn of Africa, there are notable opportunities that enable other states in the region to practice the developmental state model such as the existence of economic cooperation and regional integration to ensure peace and avoid conflict. However, there are challenges that may hinder to practice it in the region such as the prevalence of poverty, the absence of peace and stability, the absence of democracy and the prevalence of corruption in the region. The objective of this paper is to explore the challenges and opportunities to practice developmental state paradigm in the horn of Africa with a special focus on Ethiopia’s emerging experience.