The main objective of the study is to assess the effectiveness of stress testing as anrninstrument of risk mitigation in commercial banks in Ethiopia. To this end, the studyrnadopts mixed research approach and descriptive methods to enable the researcher torndescribe current effectiveness of stress test practice as one of strategic means inrnmitigating risks in commercial banks. The type of data used was both primary andrnsecondary as the research design employed was mixed-mode (qualitative andrnquantitative). As the study was conducted at institutional level purposive samplingrntechnique was used to select the banks. Hence, 10 commercial banks have been selectedrnand contacted, where the sample respondents, staffs of risk management section( riskrnexperts and officers) were used. Besides, the study is interested in banks that have beenrnoperational and whose ages are 10 and above. As it is a qualitative research, thernresearch was rely highly on primary data, therefore, appropriate instruments need to bernemployed, that has been included Interview, questionnaire analyzed . The findings of thernstudy show that commercial banks conduct stress testing on historical data and conductrnthe extensive sensitivity analysis and very limited hypothetical scenario analysis used onrninstitutional context. Even though stress test had found to be determinant tool in riskrnmanagement, needed to be employed extensively and synergistically in all risk factors byrnconsidering macroeconomic variables. Furthermore, banks should have a writtenrnguideline governing the stress testing framework in place to enhance its effectiveness.rnKeyword: Stress testing, sensitivity analysis, scenario analysis, Ethiopian commercialrnbanks