The high interest of international tourists to buy souvenirs in Yogyakarta allows street hawkers to meet international tourist as their costumers. They used English language to communicate with street hawkers. However, in reality many street hawkers still have difficulty in speaking English language. The purpose of this research was to find the challenges faced by street hawkers on the use of English language in their transaction activity. The researcher used qualitative research method and descriptive research design in collecting the data. To achieve the research purpose, the researcher hold observation and interview to three participants at Malioboro street, one of the busiest tourism place in Yogyakarta. The findings of the research showed that the challenges faced by street hawkers on the use of English language were lack of vocabulary mastery, difficulty in arranging complete sentences, difficulty in pronunciation, lack of self-confidence in speaking English language, difficulty to respond to the international tourists’ speed and accent. And the researcher also found the reasons causing challenges. Those were age factor, low level of education, anxiety, the nature of first language and second language, lack of experience on using English language, and lack of motivation on learning English language.