Tanzania has been one of the countries at the forefront of reforms inspired by the Road Management Initiative. This paper focuses on some of the main challenges that the country now faces in consolidating an institutional structure: setting up both the road fund and a new main road agency to carry the reform process forward and secure sustainable improvements in road sector performance. The paper is based on extensive fieldwork and stakeholder interviews carried out in 2001 as well as on a review of the major lessons emerging from past reform experience in Tanzania.