This article explores the current issues on the public-private divide in the Ethiopian higher education landscape and their policy implications. It critically examines issues related to legal and regulatory frameworks in order to understand the public-private divide in the Ethiopian higher education context. The article is based on two premises. The first pertains to the idea that public and private higher education providers are commonly required to meet the quality and relevance imperatives of their salient stakeholders as stipulated in the higher education proclamation. The second concerns the argument that an enabling policy and legal framework is crucial for the private higher education sector to play a key role in addressing the social demand for higher education, and thereby contribute for the socio-economic development of a country. This article draws mainly on secondary sources of data from official government documents including policies, proclamations, pertinent national and international research reviews, national and organizational level plans and strategies, statistical abstracts and reports as well as key informant interviews to analyze the issue under study. The findings revealed that the private higher education providers are playing a significant role in addressing the unmet social demand for higher education through increasing access and thereby creating employment opportunities. However, the existing playground/rule of the game is not fairly treating both public and private providers in terms of student admission, quality regulation and other policy incentives. It is argued that the government should create a fair and robust legal and regulatory framework to maximize the benefits of both public and private providers in terms of improving access, relevance, and quality education. Finally, policy implications for improvement of the current status of private providers are suggested based on the findings.