Background The main objective of medical education development centers is to improve the quality of medical education. However, after more than two decades since the formation of these centers, they are still facing numerous challenges. Objectives Given the importance of these centers, this study was conducted to identify their challenges. Methods A qualitative study was carried out in 2013 on 40 managers of Iranian medical education development centers. Data was collected during a national conference held in Tehran in the form of a questionnaire and analyzed using content analysis. Results Key challenges of the centers were identified to be resource shortage, continuous modifications in policies, weak management, structural problems, lack of communication, regulatory problems and centralization in decision making. The key challenges were divided into 17 sub-challenges. Conclusions Although decades have passed since the formation of medical education development centers, they are still facing serious challenges. To unveil the true potential of these centers in improving the quality of education, integrated interventions were addressed in this study to help reduce identified challenges.