The study investigated challenges of managing functional E.E. in public universities and graduates’ entrepreneurial practice in Rivers State. The study which adopted descriptive survey research design was guided by two research questions and two hypotheses. The population of the study comprised of 16, 234 lecturers and full-time PGS who benefit from E.E. programme in the three public universities in Rivers State. A sample of 1, 623 respondents representing 10% of the population was drawn through stratified random sampling technique. A questionnaire entitled: “Challenges of Managing Functional Entrepreneurial in Public Universities and Graduates’ Entrepreneurial Practice in Rivers State Questionnaire (CMFEEPUGEPQ)” developed by the researcher was used for data collection. The questionnaire which was properly validated had a reliability index of 0.85 obtained through Cronbach Alpha method. Mean, percentages, standard deviation and rank order were used to answer the research questions, while z-test was used to test the hypotheses at 0.05 level of significance. Results of the study revealed that the challenges of managing functional E.E. in public universities in Rivers State include among others: paucity of funds; inadequate infrastructure; inadequate E.E. lecturers and inadequate E.E. Curriculum. The study showed that the challenges of university graduates’ entrepreneurial practice include among others: high cost of office/shop space; insecurity/ harsh business environment; and inadequate entrepreneurial skills. Based on the findings, conclusion was made and the following were among others recommended: government should review the E.E. programme in public universities in Rivers state; and university graduates should be supported with start- up capital and other necessary input for entrepreneurial practice.