The major objective of this study is to assess the status of women in the informal sector with particular emphasis in south western Ethiopia. The study was carried out in Gomma Woreda of southwestern Ethiopia. In this study primary data sources were used. In the research it was found that there is statistically significant difference (P < 0.05) between religion, education, ethnicity and type of informal sector activities. Women in the informal sector were more engaged in the small retail trade activities (46.0%). On the other hand, on street selling activities come second with 31.3% as an activity of women. Besides, production and sell of local drinks (22.7%) such as ‘teji’ ‘tela’, ‘areki’, ‘shameta’ and ‘borde’ is the third important activity of women. Many women inhabit slum and squatter settlements with poor conditions of houses, electricity, water and drainage systems. Informal sector is the only hope for a large number of women who are not able to find employment in the formal sector.