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Employability must have to be attained in the journey to success in one’s career life. Graduates must be equipped with employability skills, knowledge, and personal attributes as the government of Sri Lanka allocates substantial resources for higher education. However, after graduation, a considerable number of graduates in the field of social sciences including management fail to find suitable employment, hence, are forced to accept lower-paying jobs that are not commensurate with their qualifications and some graduates are unemployed or underemployed. In this context, this study examines the level of employment and employability of management graduates of state universities in Sri Lanka, identifies problems and difficulties faced by management graduates in finding suitable jobs in the industry, and proposes policy measures for improving the employability of management undergraduates of state universities in Sri Lanka. Quantitative research methods were used to achieve the objectives of the study. Among 10,033 Management Graduates from 09 state universities, a sample of 1333 students was selected based on a stratified random sample method. A postal survey with a structured questionnaire was used to collect the data. Descriptive statics were used to analyze the data. The employability level of Management Graduates is higher than the average level. Nearly, 90% of them are employed or self-employed, but most of them are seeking a new job. The degree,personality, work experience, English proficiency and professional qualifications are the most important reasons for getting their current job. Age and lack of experience are the major constraints faced by graduates in finding a suitable job. The study proposes policy measures to enhance the level of employment and the employability of Management Graduates. Keywords: Employability, Employment Level, Management Graduates, State Universities, Sri Lanka