The dynamic business environment today has created immense pressure on the delivery of IT projects. Traditional methods of managing projects are no longer applicable and effective to manage certain IT projects as they are unable to cope with the rapid organizational and business level changes. Agile project management has caught the attention of many project managers as a means of facing these challenges and to overcome the limitations of managing IT projects. This study reports the results of an adoption analysis done on Agile Project Management in managing IT projects in Sri Lanka. The awareness level of agile project management and what factors affect the awareness are discussed in this study. The Agile project management implementation challenges and recommendations discussed in this study will help Sri Lankan organizations to successfully adopt Agile project management.