Reduction of emissions from deforestation and forest degradation (REDD+) is an internationally accepted mechanism for encouraging developing countries to contribute to climate change mitigation by reducing greenhouse gas emissions (GHGs) by preventing forest loss and degradation; and by increasing removal of GHGs from the earth’s atmosphere through the conservation, management and expansion of forests. This mechanism, however, has failed to bring the desired results in the Bale Eco-Region. Thus, the purpose of this study is to identify the main challenges of forest governance in addressing the implementation of REDD+ projects. Mixed research approach was employed. Relevant qualitative data were gathered through key informant interviews and focus group discussions. Quantitative data were collected through questionnaires. This study revealed that the community produced a total of 5.5 million metric tons of carbon dioxide equivalent in three years (between 2012 and 2015) as a contribution to the global environment. But, they were not received any economic incentives from the REDD+. Generally, while implementing the REDD+ project, forest governance of the Bale Eco-Region has faced different challenges, such as weak institutional arrangements, continuation of deforestation, low enforcement capacity, low economic benefit of the community, lack of strong coordination with media and research institutes, conflict of interest among sectors over forest land, and lack of adequate budget and logistics to undertake proper monitoring and evaluation. All these challenges have in one way or another contributed to the failure of the REDD+ project in the Bale Eco-Region.