Decentralization in Sierra Leone has been affected by several challenges. However, limited studies have specifically focused on identifying these challenges in detail. This study was therefore undertaken to identify the main obstacles affecting decentralization implementation. The objectives of the study were to examine the obstacles to decentralization policy implementation, assess the role of decentralization in rural development, and determine the impact of decentralization on rural development. Data were collected from 410 respondents using stratified random sampling techniques, while a semi-structured questionnaire was administered to obtain quantitative and qualitative responses. A key informant guide was also used to collect information from selected key informants. The data were analyzed using the “R” a widely used statistical tool for data analysis. The results revealed that inadequate funding, political interference, weak accountability mechanisms, incomplete devolution of functions and resources, and poor coordination between central government and local councils are the major obstacles affecting decentralization implementation in Sierra Leone. The findings further showed that lack of skilled personnel and late disbursement of funds continue to undermine effective decentralization implementation. To address these challenges, the study recommends that the government establish a transparent and legally protected intergovernmental framework that guarantees adequate fiscal transfers, strengthens accountability and oversight systems, and promotes regular collaboration with clearly defined roles among all levels of governance. These measures would enhance the effectiveness of local councils in delivering public services.