The purpose of this study was to investigate the status of teachers' engagement in action research and identify their challenges and opportunities to undertake such projects in primary schools of Bahir Dar City, Ethiopia. The study was conducted as part of a collaborative action research project that aimed at improving practice. For this purpose, a mixed-methods research approach was employed. Data were collected from 251 primary school teachers and six educational experts of the city administration through questionnaires and focus group discussions respectively. Both quantitative and qualitative techniques were used to analyze the data. The findings revealed that teachers' engagement in action research in the primary schools of the city was low. It was also engulfed by many challenges. However, some opportunities which reinforce the practice were identified. Based on the findings, areas of intervention that could help to increase teachers' engagement in action research in the primary schools of the city were suggested.