The employment of graduates has become an important issue of policy direction and institutional consideration across the globe. Given this new development, this qualitative study explored the nature of graduate employment in Ethiopia by examining the profile of the labour market, employability patterns, policies, strategies and initiatives taken at national and sectoral levels. The findings revealed that while there are favourable policy directions, strategies, and initiatives towards addressing the challenges of graduate employment, current achievements leave much to be desired. In addition to strengthening efforts at the level of higher education institutions and employers, combating graduate unemployment requires a broader conceptualisation and coherent national employability framework that provides workable directions and sustainable strategies. It is recommended that the provision of appropriate solutions to existing challenges needs to be devised, delivered, and coordinated at all levels and with the required level of synergy and participation from all relevant stakeholders.