This study aims at assessing child labour in the informal sector of Gulele Sub-city, Addis Ababa with particular reference to Shiro Meda and Addisu Gebaya. The study looks at the factors that contribute for the involvement of children in the labour market; the living and working conditions of child labourers; the negative and positive impacts of child labour on the working children; the perceptions of child labour from the perspectives of working children, employers and members of the society; the challenges and abusive practices child labourers face; and the legislations that protect children from labour exploitation. To undertake this study I employed qualitative research method, which is the dominant research methodology of the field of social anthropology, as the sole technique of data collection. I gathered information pertinent to the study through structured and unstructured interviews, observation, case study and focus group discussion. Theories of child labour such as the ‘labour market’, the ‘human capital’, the ‘social responsibility’ and the ‘children-centered’ were reviewed and used in order to shed light on the issue of child labour in the informal sector. All these theories were useful for this study. Child labour in general and in the informal sector in particular is not exhaustively studied in the country. But this dearth of data seems serious in the informal sector of the city of Addis Ababa, especially in the study areas. There are limited anthropological studies on child labour. Nonetheless, they did not address the informal sector all in all. They focused only on a certain area of child labour in the informal sector. Findings from this study show that poverty, migration, child trafficking, parental unemployment, the newly introduced education system (i.e., full-day schooling), and HIV/AIDS and family breakdown or displacement are the major causes of child labour in the study areas. It also shows the positive and negative impacts of child labour on the working children including the interface between child labour and education. Positively, work enables children to meet their basic needs, develop self-confidence, high self-esteem, a sense of self-reliance and responsibility, and good social interaction. It also puts negative impact on the holistic personality development of the child. It has physical, health and psychosocial impacts on the working children. Child labour and education are inversely related. Child labour affects the school enrollment and participation of children. High participation of children in school reduces the number of working children.