This study aims to find out how the ‘linkage’ has been established between formal TVET institutions and local labor markets in Ethiopia, especially focusing on 1) what strategies have been used by the government, and 2) what challenges and efforts have the formal TVET institutions made to implement the strategies. In Ethiopia, formal TVET is mainly for students who completed junior secondary education (Grade 10) to develop middle-level human resource. Semi-structured interviews were conducted with officers at TVET Agency and regional TVET committee, and teachers at four formal TVET institutions in Oromia region. The result showed that the TVET institutions are trying to adapt the market demand and situation by using various strategies which the government set, such as fixing the ratio of TVET students according to the market demands, collaborating with local enterprises/factories by sending the students for apprenticeship, and conducting market demand research with local government officers and TVET teachers. However, there are three challenges to implement the strategies. One of them is how to follow the ratio of TVET students stated by the government. Each TVET institution has tried to solve this challenge by convincing Grade 10 students and their parents but it seems to need more time to disseminate accurate information about the job market. The other two challenges are caused by the government’s relative lack of attention on the TVET institutions located in rural areas. Those TVET institutions newly started or located in the rural area are struggling to establish the linkage to the labor market since it has not yet made strong connections with potential employers. Therefore the government has to give more consideration to the situation of those TVET institutions and should provide support to them to utilize those young members of the labor force for the country’s development.