ABSTRACT In Ethiopia, various economic and political reforms which are expected to motivate the role of private sector in the economy have been made over the last couple of decades. Though some improvements have been registered as a result of such reforms, the performance of private sector has remained very low. This study conducted in order see the performances of private investment in regional distribution, sector composition, ownership structure, and employment opportunity creation. The result show that Most of private investment project concentrated around addis abeba, with manufacturing and service sector and scores higher implementation rate. In addition to this most of foreign private projects are capital incentive while Domestic private projects have higher share in employment opportunity creation. Most of the developing regions exhibited small number of private projects as compare to other regions. The study set out to analyses the major factors that affects of private investment in Ethiopia (1986-2015).Variables identified for the study include private investment, inflation rate, broad money supply, GDP per capita, interest rate, exchange rate, public investment, and external debt. To enhance the analysis, Econometrics model with OLS using multiple regressions was applied after the data sets were transformed to log form except investment lag. And, to account for inherent problems of time series data, different tests such as correlation and autocorrelation tests, stationary test, integration and co- integration tests applied. The regression results show that GDP per-capital, and external debt have significant positive long run effect on private investment, while broad money supply and average exchange rate have negative long run effect. Broad money supply, GDP per-capital, and external debt have significant short run effect. Finally expansion of infrastructure in most developing regions, increasing income generation mechanism for citizens and creating fertile investment climate are some of the recommendation forwarded. Keywords: Private investment, performance and Ethiopia. i