E-government refers to the use of Information technology to efficiently enhance government services that are provided to citizens, employees, businesses and agencies. The achievement of high level of Egovernment readiness is increasingly heralded as one of the top priorities for the countries in the world, especially in developing countries. Yemen is one of the developing countries that seeks to improve Egovernment implementation and services. Currently, Yemen government decided to revive the Egovernment by 2014–2015; but many challenges stand on the way from achieving this goal. This paper surveyed the E-government readiness ranking for Yemen from 2003 to 2014 using three factors, which are e-readiness rank, online services index and telecommunication infrastructure index; and compared the ranking of all factors with neighbored countries. In addition, this paper investigated the challenges that limit improving E-government in Yemen. These challenges are divided to three categories: organizational, technical and adoption challenges.