Internationalization has become a new phenomenon and reality impacting on higher education systems across the globe presenting varied challenges, opportunities and risks. It has also become a matter of immense policy significance to governments and institutions with the increasing benefits associated with integrating into the global network of knowledge and ensuring global competitiveness. The writing of this article is motivated by the conviction that Higher Education Institutions (HEIs) operate in line with institutional, political, economic and cultural context of the nations in which they exist. The level of support extended and policy directions set by national governments influence the nature, motivation and strength of the internationalization ventures by HEIs where objectives and rationales need to be integrated with national policies and strategies. The review article assessed the policy provisions for internationalizing the higher education system in Ethiopia. It involved a critical review of Education Sector Development Programs and national development plans in the post 1991 period. It discovered that comprehensive and organized policy framework (except for scanty provisions) that defines aims, rationales and objectives of internationalization is lacking. This has left the universities to operate in a vacuum and less planned and unorganized manner. The study suggests that most of the missions assigned to the universities, such as ensuring quality in education and research, and preparing graduates for the international market, needs to be accompanied with policy commitment towards internationalization. In dealing with such a policy, government should follow an integrated approach combining all the important elements and dimensions of internationalization.