Arunachal Pradesh is the late starter in formal education. The history of higher education in the state started with the establishment of the J.N. College, Pasighat in 1964. Now the state has more than fifty numbers of government and private higher educational institutions. The enrolment of students is recorded at 33878 during 2016-17. The overall student-teacher ratio is 1:48 and the ratio of govt. colleges alone is 1:58 against UGC laid norms of 1:25. Thus, there is acute shortage of teachers in the state. The establishment and expansion of modern and formal education is one of the most significant accomplishments during the last more than 55 years, has far reaching impact on socio-economic development of the state. The Arunachal University (now Rajiv Gandhi University) and the North Eastern Regional Institute of Science and Technology (NERIST) were established in 1984 in the same year. With this the expansion of higher and technical educational institutions in both govt. and private started in the state to fulfill the growing demand of the people. Today, the higher education system as a whole is faced with many challenges such as financing and management, lack of infrastructure, access, relevance and reorientation of policies and programmes for lying emphasis on values and quality of higher education in the state. The objectives of this study are to analyse the development of higher and technical educational institutions and challenges they have with the help of secondary data and field observations of the state of Arunachal Pradesh.