Ensuring access to good quality hybrid seeds remains a major challenge in Sub-Saharan Africa (SSA). In Ethiopia, like many SSA countries, the seed sector is plagued with problems of seed certification that drove policy changes since 2013. However, there is dearth of empirical evidence on how this measure has improved efficiency of the regulatory system. This study examines the institutional arrangement for hybrid seed production and certification, and uncovers the governance challenges therein. Data were collected through Process Net-Maps, key informant interviews and focus group discussions in three locations. While there is some evidence to believe that the decentralized seed quality regulatory system has led to improvements in seed certification services, there still exist several governance challenges. The hybrid seed production is largely dominated by public seed enterprises, which lacks the incentive to maintain robust internal seed quality control. The certification agency is deprived of both human and physical resources. There is an overall lack of accountability in the seed certification and the process is influenced by vested interests, and seed enterprises are often able to circumvent the system. The study suggests ways to improve the system through enhancing internal as well as external quality control mechanisms.