This study is conducted in order to assess the attitude of school community towards the use of sign language for instructional purpose in Bahir Dar town in the case of Yekatit 23 and Donaber primary school. In order to attain the objectives of the study, related literatures about sign language and challenges related to the use of sign language was reviewed in detail. The study used descriptive survey as a research design to explain the current trends existing in the study area. As to the samples considered for the study, because there are only two schools it appeared manageable to take them as they are. In regards to participants of the study eighty seven participants, namely 4 from the school's principals, 7 from the professional teachers in special needs, 23 regular class teachers, 13 students with hearing impairments,and 44 students without hearing impairments were involved as sample participants. With regard to data gathering instrument, questionnaire, structured interview and observation were used to collect data from the participants. The finding shows that even though teachers have positive attitude to use sign language for media of instruction, they faced many challenges and the major barriers in teachings students with hearing impairments are lack of sign language skill, lack of appropriate training and lack knowledge and experience about teaching in integrated classes. Generally the researcher suggested that policy makers and official must give priority for child's primary language. This study also confirmed that students and teachers face challenges like mismatched teacher student ratio in the classroom and the shortage of material to teach sign language as a medium of instruction.