Background: Orphans (children who have lost one or both of their biological parents) and separated children (children who lack the care and protection of their parents or legal guardian), suffer social and psychological consequences from this separation. They both lack family structure and social support, leading to poor health, limited educational opportunities and the related lifelong socio-economic challenges. They are more vulnerable than children with parents because of their lack of health care and education, food insecurity, physical insecurity and community stigma against them all of which affects their well-being. This study was aimed to explore the key causes of this problem from potential stakeholders, identify policy issues and provide recommendations for improvement. Objectives: The aim of this study was to determine magnitude, causes, and challenges of orphans and separated children, evaluate inadequacies and provide alternatives to existing policies concerning orphans and separated children in urban Moshi Tanzania 2016. Methodology: This was a cross-sectional study design conducted in urban Moshi from June 2016 to July 2016 Data was collected through direct interviews with key stakeholders and responses were noted down in notebooks. Thematic framework analysis was used to analyze the data. Data were presented based on emerging themes. Results: A total of six key stakeholders were involved in this study. The reported magnitude of OSC was 535 (five hundred thirty five) those living in children homes. The causes of orphanhood included HIV/AIDS pandemic, road traffic accidents and poverty (that influence mainly male parents to abandon their families).Conversely the reported factors that increases the number of separated children were child abuse, peer pressure, family instability and poverty. Once exposed to this vulnerability, they are both facing challenges like limited food, lack of physical security - homelessness, inadequate healthcare, inadequate education support, sexual abuse and stigma. The policies in place had delayed implementation due to understaffed social welfare, inadequate government support to OSC and social welfare as well as NGOS taking care of OSC. Conclusion: To improve the well being of OSC, the Tanzanian government should ensure that policies in place are clearly outlined so that they can be easily implemented. The government also needs to raise public awareness about children's rights at the community level with a focus on the caregivers of OSC. Non-monetary incentives such as food and school materials could be provided to households raising OSC during educational programs for child rights as these would serve as motivation to attend the workshops as well as relieving the caretakers’ burden on raising the OSC. In addition, Tanzania has a shortage of social workers in many districts including urban Moshi which affects timely policy implementation. The government could divert more of the budget to training and funding more social workers to accelerate the implementation of the policies in place.