Tanzania is experiencing a serious Human Resource for Health (HRH) crisis. Shortages are 87.5% and 67% in private and public hospitals, respectively. Mal-distribution and brain drain compound the shortage. The objective of this study was to improve knowledge on the HRH status in Tanzania by analyzing what happens to the number of medical doctors (MD) and doctor of dental surgery (DDS) degree graduates during the transition period from graduation, internship to appointment. We analyzed secondary data to get the number of MDs and DDS; who graduated from 2001 to 2010, the number registered for internship from 2005 to 2010 and the number allowed for recruitment by government permits from 2006 to 2010. Self administered questionnaires were provided to 91 MDs and DDS who were pursuing postgraduate studies at Muhimbili University of Health and Allied Sciences during this study who went through the graduation-internship-appointment (GIA) period to get the insight of the challenges surrounding the MDs and DDS during the GIA period. From 2001 to 2010 a total of 2,248 medical doctors and 198 dental surgeons graduated from five local training institutions and abroad. From 2005 to 2010 a total of 1691 (97.13%) and 186 (126.53%) of all graduates in MD and DDS, respectively, registered for internship. The 2007/2008 recruitment permit allowed only 37.7% (80/218) and 25.0% (7/27) of the MDs and DDS graduated in 2006, respectively. The 2009/2010 recruitment permit allowed 265 MDs (85.48%) out of 310 graduates of 2008. In 2010/2011 permission for MDs was 57.58% (190/ 330) of graduates of 2009 and in 2011/2012 permission for MDs was for 61.03% ((249/408) graduates of 2010. From this analysis the recruitment permits in 2007/2008, 2009/2010, 2010/2011 1nd 2011/2012 could not offer permission for employment of 482 (38.10%) of all MDs graduated in the subsequent years. Major challenges associated with the GIA period included place of accommodation, allowance (for internship) or salary delay (for first appointment), difficulty working environment, limited carrier opportunities and concern for job security. The failure to enforce mandatory registration for internship and failure to absorb all produced MDs and DDS results to loss of a substantial number of these graduates during the graduation-internship-appointment period. To solve this problem, it is recommended to establish better human resource for health management system.