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The share of world urban population living in developing countries expected to increase rapidly in the coming decades. Prevailing high rate of urbanization, which is mostly manifested in growth of population and its expected continuation are to aggravate the problem of urban land use. This book is aimed to assess the challenges that the municipality faced in urban land management in Bahir Dar town. Basically the study attempted to assess the situation in supply and demand for residential land, causes and effects of squatter settlements and institutional problems that affect urban land management. The study showed that the failure of the formal land delivery system to meet demands of all income groups of dwellers and the failure in recognizing affordable houses result in the expansion of informal and squatter settlements in the town.