Background: Public-private partnership in the health sector was introduced to improve the delivery of health services in Tanzania. Contrary, the expected outcomes have not been fully realised. This study aimed at investigating challenges encountered in implementing public-private partnership institutional arrangements in health service delivery in Kinondoni Municipality, Dar es Salaam, Tanzania. Methods: A qualitative case study design was employed, where in-depth interviews with stakeholders were held and document reviews conducted. Fourteen (n = 14) participants engaged in this study. Eight (n=8) and six (n=6) of the fourteen participants were from the public and private sector respectively. The thematic approach was used to analyse data, and ethical principles in the research process were upheld. Results: Findings revealed that although public-private partnerships are hailed for supplementing the government’s efforts in the provision of health services, institutional arrangements for the smooth provision of these services are lacking. Several challenges encumber smooth provision of health services and these include inadequate resources, ineffective monitoring and evaluation, and insufficient consultations between partners. Conclusion: Inadequate legal and policy framework, or ineffective implementation practices may influence challenges facing institutional arrangements for public-private partnerships. Therefore, strengthening of publicprivate partnerships is recommended to improve implementation mechanisms and practices such as adherence to partnership agreements and compliance to the policies, laws and regulations.