Globally, higher education institutions face ever changing challenges and demands due to rapid change in the environment; knowledge - based economy, high rate of competition and unpredictable environment. These challenges in higher education institutions need leaders who are willing to take the risks, respond positively to change, and even facilitate change, so that the rate of organizational transformation matches or exceeds the rate of environment change. The new century demands new leadership styles and skills, and although most organizations use different methods to prepare and develop their leaders such as: training programs, seminars, conferences, business school courses. The results can be both slow and unsatisfactory. Why? The main reason appears to be that most management development initiatives focus on isolated dimensions of managerial work, such as the personality of the leader, professional competences in dealing with the organization culture and environment (Marquardt, 2000). "Leadership development as practiced by most of the higher education institution according to Dilworth(1996) "produce individuals who are technologically literate and able to deal with intricate problem-solving models, but are essentially, are distanced from the human dimensions that must be taken into account". The literature and previous experiences in leadership development focus on the development of a singular leader. However this fails to develop the collective wisdom and experience inherent within the organization as whole. While effective leadership development requires the enhancement of relationships, coordination of actions and extending the social network. This paper aims to describe and discuss AL as a leadership development strategy in higher education institutions. Action Learning has emerged as a powerful problem-solving tool that has amazing capacity to simultaneously build and develop successful leaders, team, and organization. Action Learning is based on the relationship between reflection and action. We all learn through experience by thinking through past events, seeking ideas that make sense of the event and help us to find new ways of behaving in similar situations in the future. This thinking through or reflection is the essential link between the past action and more effective future action. (Beaty Liz & McGill, Ian, 1999, 21). Simply, action learning can be defined as a process that involves a small group of people working in a real problems, taking action, and learning as individuals, as teams and as an organization. Through this paper the author will explore and introduce action learning by answering several questions about it: What is action learning? What are the benefits of action learning? What are the components of action learning? What are the principles of action learning? Why action learning for leadership development? How to implement action learning development program?