The main objective of this article is to investigate Values, Beliefs and Systems Related to Lidara Indigenous security alliance and Conflict Resolution Institution among Sodo-Gurage, Libido-Mareko, Oromo, Meskan Gurage and Silte Ethnic groups in Southern Ethiopia. To attain this objective, the article employed both secondary and primary data sources. Both primary and secondary data were organized thematically and analyzed through systematic interpretation and triangulation of various sources. The article found that the major causes of conflicts in the study area are predominantly related to economic issues, especially, conflicts over land holding which are prime causes of other types of conflicts like homicide, physical injuries and property destruction. In addition to these, violations of social and cultural norms are also leads to conflict. In lidara indigenous inter-ethnic security alliance and conflict resolution institution the beliefs, values and procedures the system involves during conflict resolution take credit for the system’s success in maintaining peace and harmony of the society. Despite the theoretical controversy among scholars regarding the sources of conflict, the article further found that the four ethnic groups have develop their own view of sources of conflict, way of handling and decision enforcement mechanisms, which helps Lidara indigenous security alliance and conflict resolution institution in conflict resolution process.